Polish Fourth-Quarter GDP Growth Confirmed as Demand ReboundsDorota Bartyzel
The Polish economy accelerated for a third consecutive quarter as record-low borrowing costs and euro-region recovery boost domestic demand.
Gross domestic product rose 2.7 percent from a year earlier, matching a preliminary estimate released Feb. 14, according to a statement today from the Warsaw-based Central Statistical Office. Economic growth quickened from 1.9 percent in the third quarter. GDP rose 0.6 percent from the previous three months.
Consumers in the nation of 38 million are more willing to spend as the central bank has kept its reference rate at a record low since July, while an improving outlook for the euro region keeps companies from cuts in jobs and wages. The European Commission this week forecast the European Union’s largest eastern economy will expand 2.9 percent this year, the bloc’s third-fastest rate behind Latvia and Lithuania.
“The revival is confirmed in all growth components and it’s providing a solid base for more acceleration,” Tomasz Kaczor, Warsaw-based chief economist at Bank Gospodarstwa Krajowego, said in an e-mailed note. “The data will favor considering an increase in interest rates in the second half.”
The zloty traded little changed at 4.1612 against the euro at 10:57 a.m. in Warsaw. It has gained 2.2 percent this month, the fourth-best performance among 24 emerging-market currencies tracked by Bloomberg after the Indonesian rupiah, the South African rand and the Brazilian real.
Domestic demand gained 1.2 percent in the fourth quarter, after increasing 0.5 percent in the previous three months as private consumption rose 2.1 percent, compared to a 1 percent increase a quarter before, the statistics office reported. Investments rose 1.3 percent in the last quarter after growing 0.6 percent in the previous three months, the office said.
The outlook for Poland’s economy has become brighter thanks to improved performance of its main trading partners. Germany is the biggest buyer of exports from Poland.
The commission this week confirmed the Polish central bank’s forecast that inflation will stay subdued. That may persuade policy makers to keep borrowing costs unchanged longer. The monetary authority pledged to leave its benchmark rate at 2.5 percent until at least mid-2014.
Inflation remained below central bank’s 2.5 percent target for a 14th month in January, with consumer prices rising an annual 0.7 percent, official data showed this month. Analysts in a Bloomberg survey predicted 0.9 percent price growth.
“Monetary tightening is somewhere out there on the horizon, most probably in the second half, although I’m not at all certain it will happen then,” central banker Jerzy Hausner said in an interview last week.