The average wage in Poland increased faster than forecast in January by 12.8% year-on-year to 7,768 Zloty (€1,797) before taxes, according to data from state agency, Statistics Poland (GUS).

Analysts, who had predicted a rise of around 11%, said wage growth was mainly boosted by a record increase in the minimum wage that was partially introduced at the beginning of the year.

Furthermore, real wages increased by 8.9% in January, the highest since April 2008, thanks to an inflation slowdown last month.

The data on average wages includes earnings of employees at businesses with more than nine members of staff. Self-employed people and those working within the public sector are not included within the average figure.

“The main factor driving the increases was the increase in the minimum wage,” said the head of the macroeconomics department at the Polish Economic Institute (PIE), Jakub Rybacki to broadcaster RMF FM.

Poland will see a record increase in the minimum wage this year. However, the rise will be undertaken in two phases.

The initial increase, from 3,600 Zloty (€832,71) to 4,242 Zloty (€981,21) came into effect last month.

Then, in July, the country’s minimum wage will rise further to 4,300 Zloty (€994,87), marking a total increase of 19.4% compared to December last year.

Moreover, real wage growth in Poland was negative for 12 of the 14 months between June 2022 and July 2023, as a result of high inflation from the economic rebound after the pandemic and Russia’s invasion of Ukraine.

Wages returned to growth in real terms in August last year as inflation begin to fall. Since then, Poland’s inflation has continued its slowdown, falling under 4% in January for the first time in almost three years.

According to analysts, wages will continue to increase in Poland in the coming months.