Holiday season better than ever?
The fourth quarter of the year has always been good for retailers. Christmas period is the time for which almost everyone is planning some heavy spending on food and presents. End of the year is also the time for Black Friday, Cyber Monday, and pre-Christmas sales and discounts. 2016 is going to be no different. In fact, experts are expecting record profits for the retail industry in Poland.
The situation on the job market looks very good. According to the recent data published by the Central Statistical Office (GUS), the official unemployment rate in Poland fell to the lowest levels in 25 years. Taking into consideration the BAEL statistics (with different criteria for unemployment), the number is even lower.
As the unemployment is going down, the average salary as well as disposable income figures are going up. From January 2017, a higher minimum salary amount will come into force. Some people may take that into consideration when planning their Christmas shopping.
However, the biggest boost for consumption will come from the 500+ programme, which affects all Polish families with two or more children as well as those single-child families with low income. Poles receive a monthly child benefit in the amount of 500 PLN, which is one fourth of the minimum salary. This is a big financial support for many people. Surely, a lot of the money will be spent on presents.
Surveys and experts indicate that this year’s December may be exceptional in terms of consumer spending. An average Kowalski family is planning to spend approximately 1,500 PLN this Holiday season, which is 100 PLN more than last year. In total, we are going to spend 20 billion PLN. This is good news for the state budget, as more consumer spending means more income in the form of VAT tax.
More money at the disposal of Poles brought up the long-forgotten inflation. Eurostat data show a 0.1% increase of prices for October 2016. The country experienced a long streak of deflation (i.e. negative inflation). It lasted from September 2014. Even though deflation is not considered beneficial for the economic growth, experts say it did not have much negative impact on the economy.
Consumers may be optimistic and wait for Christmas in good humours, but some bad news is coming from the statistics experts. GDP growth of Poland in the third quarter fell to 2.5%, although expectations were higher. Although this is nowhere near recession, many fear there are hard times coming for the country’s economy.