Poland’s unemployment rate slid 1pp y/y to 5.1% in May, Poland’s statistical office GUS said on June 24.

The GUS reading confirms an estimate by the Ministry of Family and Social Policy published earlier this month. The unemployment level is the joint-lowest since 1990 and indicates that the Polish economy is still going strong mid-way through the second quarter ahead of the expected slowdown in the second half of the year.

For now, however, demand for labour remains strong, pushing up wages and consumption – the latter also spurred by the influx of war refugees.

There are early signs of consumer confidence waning, however. Poland’s consumer confidence index fell 5.4 points to -43.8 in June, a new 12-month low.

Also data from the corporate segment of labour market signalled cooling of economic growth ahead.

There were 850,200 registered unemployed in Poland at the end of May, GUS also said. That marked a drop of 176,500 – or by 17.2% – versus May 2021.

In m/m terms, the unemployment rate decreased 0.1pp, while in nominal terms the number of the unemployed fell 3.2%, or by 27,700.

For several months in a row now, the lowest unemployment rate, 2.8%, has been in the Poznan province in the west. The province’s joblessness rate declined 0.9pp y/y.

The biggest regional unemployment rate was in the Olsztyn province, where it came in at 7.9%. That was still down 1.9pp y/y. In no region did the unemployment rate increase in y/y terms.

The countrywide unemployment rate is expected to hover around 5% in 2022, with caveats linked to the impact of the war in Ukraine and to the central bank’s current tightening cycle.

The National Bank of Poland hiked its reference interest rate nine consecutive times between October and June from 0.1% to 6% to contain rampant inflation.

The monetary tightening is expected to cool Poland’s economic growth, which could lead to slightly higher unemployment rate at the end of 2022.