Poland sees job losses and slower wage growth in April, weighing on economic outlook

The April 2025 edition of the Prosperity Index (WD) indicates continued stagnation in economic sentiment, with only marginal movement compared to the previous month. The index has been following a downward trajectory since the beginning of the year, largely due to persistent job losses in the enterprise sector and ongoing inflationary pressures.

For the third consecutive month, employment in the enterprise sector has declined at an annual rate of 0.9%. Since January, the sector has shed approximately 10,000 full-time positions, underscoring continued weakness in the labor market. Analysts attribute this trend to a combination of cautious business sentiment, reduced hiring, and structural adjustments in several industries.

While wage growth remains relatively strong, it has shown signs of moderation. In March, average nominal wages in the enterprise sector rose by 7.7% year-on-year. However, this increase was outpaced by consumer price growth, resulting in a more modest 4.5% gain in real terms. This marks a slowdown in purchasing power improvement compared to earlier months.

The interplay between rising prices and slower wage growth is raising concerns about household consumption, a key driver of domestic demand. Economists warn that if employment continues to contract and real wage growth weakens further, broader economic activity could face additional headwinds in the second half of the year.

Despite some underlying resilience, the April data suggests the recovery remains uneven and vulnerable to both internal and external pressures. Policymakers are expected to monitor labor market and inflation developments closely as they consider adjustments to fiscal and monetary measures in the coming months.

Source: BIEC

IMF Financial Stability update highlights growing uncertainty, rising global risks

The International Monetary Fund (IMF) presented its latest Global Financial Stability Report (GFSR) during a press conference yesterday, outlining growing risks in global markets driven by heightened policy uncertainty and downward economic revisions.

Tobias Adrian, Financial Counsellor and Director of the IMF’s Monetary and Capital Markets Department, emphasized that global financial stability is facing increasing pressure from a combination of elevated asset valuations, rising global debt levels, and leverage risks in the non-bank financial sector.

“Our baseline scenario is one of rising downside risks and slightly weaker global economic activity,” Adrian noted. “While valuations in equities and credit markets have adjusted somewhat, they remain elevated by historical standards. We are monitoring these vulnerabilities closely.”

The IMF report identifies three main financial vulnerabilities:
1. Asset Valuations: Equities and risk assets remain highly valued, despite recent corrections, with credit spreads still relatively tight.
2. Leverage and Maturity Mismatch: Particularly within non-bank financial institutions, increased market volatility has triggered some deleveraging, though market functioning has so far remained orderly.
3. Global Debt: Rising public debt, especially in emerging markets, increases exposure to tightening financial conditions and could threaten stability if not addressed through fiscal reforms.

During the Q&A, IMF officials responded to questions on the effects of trade tensions, central bank independence, artificial intelligence in finance, and emerging market vulnerabilities. Jason Wu, Assistant Director at the IMF, highlighted that while some emerging markets have shown resilience, others remain at risk due to high sovereign debt and tighter global financing conditions.

The IMF also addressed recent movements in safe-haven assets. While gold prices have risen in line with typical risk-off sentiment, U.S. Treasury yields have also increased—unusual during periods of uncertainty. The depreciation of the dollar, despite elevated market volatility, was described as “notable but not conclusive,” with long-term safe-haven status not considered threatened.

Other key topics included:
• Artificial Intelligence: The IMF sees both opportunities and risks. While AI could enhance productivity and access to finance, concerns about cybersecurity and market concentration remain.
• Sovereign Debt in Emerging Markets: Nigeria’s return to Eurobond markets was cited as a sign of renewed investor confidence, though risks persist amid global uncertainty.
• U.S. Public Debt and Treasury Markets: While the IMF currently sees U.S. debt as sustainable, officials warned of challenges tied to rising issuance and potential liquidity pressures in the Treasury market.
• Geopolitical Risk: The IMF acknowledged increased geopolitical tensions as a relevant risk to market confidence, though current market reactions remain within historical norms.

On resilience building, IMF officials reiterated the importance of fiscal sustainability, robust regulatory frameworks, and strong institutional buffers. They stressed that financial institutions must be prepared for unexpected shocks, and that regulation remains crucial in maintaining stability.

Tariffs prompt concerns of stagflation: Analysts examine three economic scenarios

In response to heightened trade tensions triggered by the U.S. tariff announcement on April 2, a group of analysts from MSCI has developed three macroeconomic scenarios to assess potential impacts on financial markets and diversified investment portfolios. The scenarios include stagflation, recession, and a worst-case combination of both.

The main concern lies with stagflation — a situation marked by stagnant economic growth and rising inflation — where central banks have limited scope to provide monetary stimulus. In this scenario, both equity and bond markets may decline simultaneously.

In the most adverse projection, a recession paired with persistent inflation could lead to a nearly 35% drop in U.S. equity markets from pre-announcement levels. A diversified portfolio of global equities, U.S. bonds, and real estate could fall by up to 19%.

Overview of the Scenarios
• Stagflation: Economic growth slows to 0% while inflation increases by two percentage points, driven by supply shocks and trade barriers. Central banks raise interest rates to curb inflation, which further suppresses growth.
• Recession: GDP contracts by 3%, but falling demand helps ease inflation. The Federal Reserve has room to lower rates, leading to a quicker recovery.
• Recession with High Inflation: A combination of economic decline and elevated inflation due to ongoing supply chain disruptions, resembling the oil shocks of the 1970s.

The potential impact on portfolios was assessed using MSCI’s stress-testing model. Under the worst-case scenario, the sample portfolio saw a 19% loss, compared to a 13% drop under stagflation and 9% in a recession scenario. Losses were more severe for equities, while bonds provided a buffer only in the absence of inflation.

Implications for Asset Classes

Under stagflation or inflationary recession, bond yields rise, reducing their value, and equity markets face pressure from both declining growth and higher rates. In contrast, during a standard recession, falling rates can support bond prices and partially offset equity losses.

The study also compared these scenarios with a possible market reversal to pre-tariff conditions. If macroeconomic pressures ease, portfolios could regain some ground, though the likelihood of a quick reversal remains uncertain given ongoing policy shifts and geopolitical risks.

Broader Context

These scenarios are modeled against a baseline set at the beginning of 2025, when expectations pointed to strong growth and declining inflation. Since then, the economic environment has shifted due to new tariffs and increased uncertainty.

The analysis underscores the importance for investors to consider a wide range of outcomes in light of current macroeconomic volatility. In particular, stagflation presents a unique challenge, as the typical tools to support markets — such as interest rate cuts — may not be available.

Authors: Monika Szikszai, Lokesh Gupta, Thomas Verbraken and Rick Bookstaber – MSCI

Panattoni secures €14 million loan from Alior Bank for Lublin IV expansion

Panattoni has secured €14 million in financing from Alior Bank to support the development of a new 11,190 sqm build-to-suit facility at Panattoni Park Lublin IV. The project will accommodate one of the company’s logistics clients and is part of the ongoing expansion of the warehouse complex located in Świdnik, near Lublin.

Panattoni Park Lublin IV currently comprises two buildings totaling 53,000 sqm, with tenants operating in sectors such as automotive, FMCG, and packaging. Approximately 13,000 sqm of additional space remains available for lease.

The park is situated within the Economic Activity Zone in Świdnik, offering access to the Lublin-Zadębie junction and major expressways including S12, S17, and S19. These connections are part of the international Via Carpatia corridor, providing strategic advantages for transport and logistics.

Panattoni has previously delivered over 272,000 sqm of industrial space in the Lublin region. The newly financed facility will function as a cross-docking terminal designed to meet the operational requirements of an established logistics partner.

IMF downgrades Czech economic growth forecast to 1.6% for 2025

The International Monetary Fund (IMF) has revised its forecast for the Czech Republic’s economic growth, now expecting GDP to increase by 1.6% in 2025. This marks a notable downgrade from its previous projection of 2.4% made in November. The 2024 growth estimate stood at 1.1%. For 2026, the IMF anticipates a slightly higher growth rate of 1.8%.

The downgrade follows broader concerns about international trade tensions and the potential effects of U.S. tariffs. The Czech Ministry of Finance also reduced its growth forecast to 2%, citing the impact of 10% U.S. tariffs on key exports like cars, steel, and aluminum. A further 20% tariff, if implemented, could push Czech growth down to 1.6%, according to the ministry.

Within the Visegrad Group, the Czech Republic is projected to outpace Hungary and Slovakia in 2025, whose economies are expected to grow by 1.4% and 1.3%, respectively. However, Poland is forecast to grow more rapidly at 3.2%. For 2026, Hungary is set to surpass the Czech Republic with 2.6% growth, while Poland’s economy is expected to expand by 3.1%.

The IMF also expects inflation in the Czech Republic to rise slightly to 2.5% in 2025, before easing to 2.0% in 2026, aligning with the Czech National Bank’s target. Unemployment is forecast to decline from 2.8% to 2.5% this year and to 2.4% next year.

Global Outlook Weakened

Globally, the IMF has lowered its growth outlook as well. It now expects the world economy to expand by 2.8% in 2025 and 3.0% in 2026, down from the 3.3% projected in January. The downgrade reflects growing uncertainty from trade disputes and rising geopolitical tensions, particularly following new tariffs introduced by the United States.

This year’s global growth forecast remains below the 2000–2019 average of 3.7%. In 2024, the global economy expanded by 3.3%. The IMF warns that political and trade instability, especially the recent surge in global tariffs, may lead to economic disruptions and market volatility.

Inflation worldwide is projected to fall to 4.3% in 2025 and 3.6% in 2026. However, inflation expectations have slightly increased since January, particularly in advanced economies.

In the U.S., GDP growth is expected to slow to 1.8% in 2025, compared to 2.8% in 2024. The eurozone is also projected to experience modest growth of 0.8%, down from 0.9% last year. Germany’s economy is expected to stagnate, after contracting by 0.2% in 2024.

Growth in China is forecast to slow to 4% in 2025 from 5% last year, while Russia’s economy is expected to decelerate significantly to 1.5%, down from 4.1%.

Risks and Recommendations

The IMF notes that downside risks remain dominant. Continued trade policy uncertainty, possible financial instability, and external shocks could further slow global growth. The fund also warns of the impact of ageing populations, reduced migration, and limited fiscal space on long-term growth potential.

To address these challenges, the IMF recommends stronger international cooperation and domestic reforms. Countries are encouraged to stabilize their economies through prudent fiscal and monetary policies, strengthen debt management, and create a business-friendly environment. Central banks, the IMF stresses, must balance monetary tightening with maintaining financial stability.

Source: CTK

Minimum decent wage in Czech Republic reached CZK 45,865 in 2023

The minimum decent wage required to support an adult with a child in the Czech Republic was CZK 45,865 gross per month in 2023, according to a team of experts from the Platform for Minimum Dignified Wage. The figure rose by CZK 292 year-on-year and reflects the income needed to cover basic living costs, leisure activities, and modest savings.

Despite this benchmark, 63% of full-time employees across the country earned less than the calculated threshold. In Prague and Brno—where the cost of living is significantly higher—a dignified wage was determined to be CZK 53,953. Even at this higher rate, 59% of employees in those cities earned below the benchmark. Experts estimate that around 2.5 million workers across the country did not reach the minimum decent wage level in 2023.

The national minimum wage last year was CZK 18,900, while the average wage stood at CZK 46,165, according to data from the Czech Statistical Office. Economist Jan Bittner noted that the private sector saw higher wage increases, while stagnant wages in the public sector led more state employees to fall below the decent wage threshold.

The study found that 56% of employees overall, and 72% of women, earned less than the calculated decent wage. In the public sector, 56% of workers were below the threshold, compared to 65% in the private sector. Among employees under 35, about 32% reached the decent wage nationally, and 35% did in Prague and Brno.

The Platform for Minimum Dignified Wage, comprising over 20 experts in economics, sociology, and related fields, has been calculating these figures since 2016 based on data from national institutions and ministries. The wage is designed for a full-time worker supporting one dependent.

Key monthly expenses in the 2023 calculation included housing and utilities at CZK 14,373, food at CZK 8,199, clothing at CZK 1,496, transportation at CZK 1,846, healthcare and hygiene at CZK 1,412, telecommunications at CZK 1,323, leisure at CZK 3,996, and savings at CZK 4,856.

In Prague, the dignified wage rose by CZK 6,235 compared to the previous year, mainly due to a CZK 3,943 increase in housing costs. Food expenses remained steady at CZK 8,443. Experts applied the same decent wage benchmark to Brno, reflecting similar living cost trends in the city.

Source: CTK

Garbe Industrial Real Estate acquires development site near Madrid

Garbe Industrial Real Estate GmbH has expanded its presence in Spain with the acquisition of a 24,000-square-metre development site in Alcalá de Henares, located northeast of Madrid. The site will accommodate a logistics facility with a planned built area of approximately 12,500 square metres. The total investment is expected to be around €15 million.

The property lies close to the A2 motorway, a key route linking Madrid and Barcelona. Its location, around 30 kilometres from Madrid’s city centre, was a decisive factor in the acquisition. “We are pleased to have secured land in such a strategically advantageous area,” said Sven Schoel, Managing Director of Garbe Industrial Real Estate in Spain.

Plans for the development include approximately 12,000 square metres of warehouse space and 500 square metres designated for office and staff facilities. Construction is expected to begin in early 2026, with project completion anticipated by the end of that year.

This marks Garbe’s third project in Spain, following acquisitions in Numancia de la Sagra in the province of Toledo and in the greater Barcelona area. “The logistics sector in Spain offers strong growth prospects,” added Schoel. “We are pleased to be expanding in another key location with this project in Alcalá de Henares.”

The acquisition was supported by real estate consultancy CBRE and law firm Gómez-Acebo & Pombo.

Rising impairments in Non-QM and DSCR mortgage segments amid market shifts

Non-qualified mortgages (non-QM) and debt-service coverage ratio (DSCR) loans have shown increasing impairment rates over the past two years, despite ongoing cash flows and relatively low losses. According to recent analysis, this trend reflects broader pressures from inflation, rising mortgage rates, and varying borrower profiles.

The DSCR loan segment—used primarily for rental property financing—now represents over half of the securitized non-QM loan market. While delinquency levels in these and other non-QM loans have doubled since 2022, performance remains stable relative to traditional prime and credit risk transfer (CRT) pools. This divergence is largely due to distinct loan features and borrower characteristics.

Recent data highlights that loan attributes such as credit scores and loan balances are more predictive of impairments than loan-to-value (LTV) ratios or DSCR alone. Lower FICO scores and larger loan amounts show a higher likelihood of delinquency, particularly in loans below 700 credit score thresholds. Despite this, the average original LTV for impaired loans has remained around 70%, helping limit loss severity.

Loan performance also varies by size, with higher-balance loans generally showing greater impairment rates. In the non-QM segment, loans in the $700,000 to $1 million range saw impairment rates up to 3.7%, while DSCR loans of similar size experienced 4.3%. However, losses upon default remain limited due to sustained home price appreciation and the ability of many borrowers to repay through property sales.

Transition data suggests that many delinquent loans either cure or are prepaid within six months, particularly those only 30 or 60 days overdue. Losses have been minimal even in loans that reached 90+ day delinquency, with average severities near 1.5% across both non-QM and DSCR loans.

Regional variations exist, with concentrations of non-QM loans in California, New York, Texas, and Florida. However, higher property prices in these states have not consistently correlated with higher loss rates.

Looking forward, the outlook remains cautious. While the housing market continues to support loan performance, growing affordability concerns and a potential uptick in unemployment—forecasted to reach 4.5% by year-end—could pressure future repayment capacity. Additionally, rising property taxes and the expiration of student loan forbearance may further strain borrowers.

Despite higher impairment levels, continued home equity strength and conservative LTVs suggest that losses may remain contained for now. However, analysts will be closely watching economic developments and housing trends for signs of further stress in the non-QM and DSCR mortgage segments.

Sources: S&P

Average gross monthly wage in Poland’s enterprise sector reaches 8,736.49 PLN in Q1 2025

According to an official announcement from Statistics Poland, the average gross monthly wage and salary in the enterprise sector reached 8,736.49 PLN in the first quarter of 2025. The figure reflects the total earnings before tax and social security contributions, including basic wages, bonuses, and other financial benefits.

This data provides a key indicator of income trends within Poland’s business sector, which includes medium and large enterprises employing more than nine people. The reported amount is a nominal average and does not account for inflation or regional income differences.

Compared to the same period last year, the wage level indicates continued growth in earnings, which may be influenced by several factors. These include inflation-driven wage adjustments, growing labour demand in various industries, and increases in minimum wage levels introduced at the beginning of the year.

Labour market analysts are closely monitoring wage developments in the context of Poland’s broader economic conditions. The increase in average wages contributes to higher consumer spending potential but also raises questions about labour costs and productivity in key sectors.

The wage growth is also viewed in relation to ongoing discussions about labour shortages and wage pressures in specific industries such as construction, manufacturing, and IT. Economists suggest that while rising wages may support household income and reduce wage inequality, sustained wage growth needs to be aligned with productivity improvements to maintain competitiveness.

CPK approves key planning stage for Sieradz–Poznań high-speed rail link

Centralny Port Komunikacyjny (CPK) has approved the Program and Spatial Concept (KPP) for Railway Line No. 85, advancing plans for the high-speed rail connection between Sieradz, Kalisz, Pleszew, and Poznań. This section forms part of the “Y” line, a strategic infrastructure project linking Warsaw, CPK, Łódź, Poznań, and Wrocław.

The approved KPP outlines preliminary technical and spatial assumptions, including new tracks and stations, and serves as the foundation for construction design. With this milestone reached, CPK is beginning the next stage of work: developing the construction design, scheduled to continue through the third quarter of 2026. The company aims to submit a construction permit application by the end of that year, with construction expected to begin in early 2028. The line is projected to be operational by 2035.

Environmental permit applications for the 146-kilometre route have already been submitted. The design speed for passenger trains on this segment is 350 km/h. Once completed, the high-speed line will cut travel time between Warsaw and Poznań to 1 hour and 38 minutes.

This route forms part of the Trans-European Transport Network (TEN-T), a European Union initiative aimed at enhancing cross-border transport and integration. Funding of PLN 162 million for the Sieradz–Poznań section was secured through the EU’s Connecting Europe Facility (CEF2), underlining its significance for regional and European mobility.

The project is being developed by CPK in collaboration with the BBF and IDOM engineering consortium.

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