Poland’s Economy Expands at Fastest Pace Since 2008 on Investment Rebound

Poland’s economy expanded at the quickest pace in three years in 2011 as companies boosted investment and a weakening zloty buoyed exports.

Gross domestic product rose 4.3 percent from a year earlier, compared with a revised 3.9 percent in 2010, the Central Statistical Office in Warsaw said today. The median estimate of 27 economists surveyed by Bloomberg was 4.2 percent. The annual pace was the fastest since the economy grew 5.1 percent in 2008.

Poland’s economy, the largest of the European Union’s eastern states, was the only one in the 27-nation bloc to avoid a recession in 2009. EU funds helped improve infrastructure and modernize production, while the weaker zloty kept exports growing as the euro area’s debt crisis damped demand on the country’s most important markets, including Germany.

“This is a very good result,” Anna Zielinska-Glebocka of the central bank’s Monetary Policy Council said in an interview on TVN CNBC after the 2011 GDP estimate was released. “Let’s hope the performance can be sustained this year.”

The zloty dropped 11.2 percent against the euro last year, the fifth-worst performance among more than 20 emerging-market currencies tracked by Bloomberg. The currency traded at 4.2220 per euro at 10:14 a.m. in Warsaw, up 0.2 percent on the day.

Poland should be able to maintain economic growth at better than a 3 percent pace this year, Zielinska-Glebocka said.

Investments Quicken

Fixed-investment growth accelerated to 8.7 percent in 2011 from a 0.2 percent decline a year earlier, while private- consumption growth slowed to 3.1 percent from 3.2 percent, the statistical office said.

“Consumption has weakened for households and corporates, but investment has recovered pretty strongly,” Raffaella Tenconi, an economist at Bank of America Merrill Lynch in London, said in a Jan. 20 interview. “This seems partly to be because the public sector wanted to be forward looking and anticipated a fiscal crisis that in the event never happened. Also, the German economy is doing better than we expected.”

Exports rose 13 percent to 12.5 billion euros ($16.4 billion) in November from a year earlier, according to the latest foreign trade figures from the statistical office.

To contact the reporters on this story: Katya Andrusz at kandrusz@bloomberg.net Dorota Bartyzel in Warsaw at dbartyzel@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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