How much will the unemployment go down? [CINKCIARZ.PL ANALYSIS]
The statistics are clear: good times are coming for the employees. During the three years to come the unemployment may fall to the lowest level since the beginning of the nineties – explained Piotr Lonczak, Cinkciarz.pl analyst.
In the end of December 2015, the Polish Central Statistical Office (GUS) informed that the unemployment rate in November was 9.6%. On the other hand, the forecast from the Labor Ministry published few weeks ago said that in December 2015 the amount of people without stable employment increased to 9.8%. It is not very often that the estimations of the ministry are not coherent with the data from GUS. Thus, considering the ministerial calculations we have to assume that the unemployment rate during the whole 2015 was 10.6%. This result would be the lowest since 2008, when the unemployment level was 9.8%.
A year ago the unemployment percentage was 12.3%. Thus, a decrease in the unemployment rate to the past year is 1.7%, and it is the strongest since 2008. The employment data are also very optimistic. According to GUS, employment increased in the third quarter to a record level of 16.2 million people.
Why does the unemployment go down?
The above mentioned reports show that we are currently dealing with a strong revival on the labour market. Moreover, the situation may become even better. The most important factor which may be responsible for a further decrease in unemployment rate, is an improving condition of the eurozone's countries. The policy of the European Central Bank (ECB) made a breakthrough on the labour market, and the companies started to borrow money. Additionally, the problem of bankruptcy of any of the eurozone's countries has been eliminated. Also, currently nobody even speaks about the end of the eurozone. With 56.5% of exported goods, the monetary union is Poland's most important trading partner. Between January and November 2015, the sale of Polish goods increased by approximately 10%. Considering the above factors, we can expect that 2016 will also be favourable for the Polish companies. Moreover, this year the exchange rate of the zloty should encourage exporters to a greater degree than in the past years. In this context, a downgrade of Poland's rating by Standard & Poor's can work for exporters' advantage, because it will keep the exchange rate of the PLN low.
Condition of the eurozone has also a direct impact on the unemployment rate level in Poland. The studies show that the Poles are willing to leave the country and search work abroad. According to the data from the Work Service company, 15% of professionally active or those who are able to enter the labour market considers emigrating in order to find a job. Along with a further improvement in the European labour market's condition, an increasing amount of Poles may decide to go abroad. It is possible that the scale of this phenomena will be definitely smaller than in the period right after Poland's access to the European Union. However, it may still have a significant impact on the national labour market.
The situation in Poland can also be of great significance. Previously the consumption of households fuelled the GDP, and at the same time supported the employment. In the following years this factor can strengthen the revival to an even greater degree, due to the government's social program 500+, and a decrease in tax-free amount (it is forced by the verdict of the Constitutional Tribunal). Moreover, the government's infrastructural projects are to be intensified. This should support the investments, especially in 2017. According to the current program for years 2014-23, the total of 174 billion PLN will be spent for the construction and modernisation of the roads and railways.
Record low unemployment
Considering the tendencies occurring in the Polish and European economies, we may expect that the revival on the unemployment market will be maintained. Thus, the unemployment rate will decrease. In respect of this, the past year was the best for seven years. The unemployment's level lower than 9% was previously quoted in 1991.
The optimistic scenario assumes reaching the level from the beginning of the nineties already in 2016. Even though, it is ore realistic that the average rate of unemployment will go down to approximately 9.5%. In two following years, on the other hand, it may even go below 8%. This would mean that the very good times for the employees have come, and a perspective of an increase in salaries.
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