Tight labor market to continue in 2025

It seems that unemployment rate ticked up in several countries in 2024. The average unemployment rate between January and November 2024 is slightly higher in Czechia, Hungary, Poland and Slovenia when compared to 2023. While in Czechia and Hungary the economic growth was rather moderate, in Poland 2024 GDP growth around 3% is close to the economic potential. The unemployment rate increases are not substantial, however. Moreover, Czechia still had the lowest unemployment rate in the whole European Union in November 2024 (2.8%), followed by Poland, where unemployment rate was at 3% in November 2024 according to LFS data (in local metrics unemployment rate was at 5%). In Croatia, Romania and Slovakia, unemployment rates went further down. In Croatia the decline is most substantial (roughly 1 percentage point) with economy outperforming the peers. All in all, we keep seeing the labor market as very tight and do not expect unemployment rate to go visibly higher in 2025.