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    How Wage Growth in 2024 Could Boost the Creditworthiness of Poles

    In an analysis published on Thursday, Bartosz Turek, the chief analyst at HRE Investment Trust, suggests that the anticipated wage growth in 2024 may enhance the creditworthiness of the Polish population by several to a dozen percent.

    Turek asserts that rapidly increasing salaries and declining interest rates in the coming year will contribute to the rise in the credit capacity of Poles. Referring to the latest inflation projection prepared by NBP analysts, he notes that wages in Poland are expected to be on average 9.3% higher in 2024 than in 2023. Even after deducting expected inflation, this translates to a real wage increase of approximately 4.5%. Turek highlights that this would be the best outcome since 2019, and he anticipates that it will lead to an increase in the credit capacity of Poles by several to a dozen percent.

    He also suggests that loans might become more affordable. “Futures contract prices suggest that the Monetary Policy Council (Rada Polityki Pieniężnej) may return to the path of interest rate cuts around spring. Additionally, after the Federal Reserve’s December decision, there is hope that the world’s most important economy, the USA, will also shift towards easing monetary policy in 2024,” writes the expert.

    According to Turek, as of December 14, futures prices even indicate that by the end of 2024, the basic interest rate may be around 4% in Poland (currently at 5.75%). “If this were to happen, loan installments would significantly decrease, allowing for an increase in credit capacity by 10 to 20 percent,” he points out. However, he does not rule out the possibility that banks, amid falling interest rates, may raise loan margins, meaning that the growth in credit capacity could be lower.

    Citing an analysis by HREIT, Turek reminds that a three-person family with an income at the level of two average national salaries can borrow an average of PLN 638,000 for the purchase of a flat.

    He also notes that the new government signals its intention to maintain the continuity of the “Safe Credit 2%” program. He adds that this program has enabled thousands of Poles to buy a home. “These are often individuals who, without support from the state budget, could not afford their own ‘four corners’,” he points out.

    According to Turek, the sharp increase in demand for housing has compelled developers to start more new projects, which is already limiting pressure on the rise in housing prices.

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