EC cuts forecast of Poland's 2012 GDP growth by 1.2pp to 2.5%.

By bne IntelliNews November 14, 2011
Poland's economic growth will amount to 4.0% in the whole of 2011 (vs. 3.8% in 2010), as weaker external demand is set to hamper export growth. In addition, turbulence in financial markets have begun to weigh on consumer and producer confidence, ultimately limiting private investment expenditure, employment growth and the expansion of private consumption. These developments are expected to result in real GDP growth slowing to 3.6% y/y in H1 of 2011, the European Commission has announced in its autumn forecasts. Still, it retained the full-2011 forecast at 4.0% (as compared to the May document), but slashed the 2012 projection to 2.5% from 3.7%. The Polish government now plans to pick one out of three economic growth scenarios in early December. These scenarios, to be included in the 2012 state budget draft, assume the 2012 growth at +3.2%, +2.5% and -1.0%, respectively, at the beginning of December. In 2011, the economy is still expected to expand by 4.0%. As for the EU27 perspective, the outlook has deteriorated as compared to the Mat forecasts, the EC also noted. The protracted sovereign-debt crisis has taken its toll on confidence affecting investment and consumption. The first signs of improvements for GDP are projected for the second half of 2012, however, with very limited impact on job creation.

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