EC raises forecast of Poland's 2010 GDP growth to 3.5% from 3.4%.

By bne IntelliNews November 30, 2010
The European Commission has raised its forecast for Poland's 2010 GDP growth to 3.5% from 3.4% expected in September, the Commission said in a report published on Monday. It also raised its forecast for the country's 2011 economic growth to 3.9% from 3.3% seen in the spring. In 2012, Poland's GDP should grow by 4.2%, according to the Commission. A substantial stimulus package helped Poland to stay on a growth track in 2009 (Poland was the only country in the EU to record positive growth, at 1.7%); however, as the Commission noted, it resulted in a sizeable increase in the headline deficit from 3.7% in 2008 to 7.2% of GDP in 2009. " In 2010, despite higher than projected growth and a few consolidation measures, the headline deficit is expected to reach almost 8% of GDP . This further deterioration can be explained mainly by lower revenues from Corporate Income Tax (due to the authorisation to carry over the losses accumulated during the crisis to the subsequent years), higher consumption and investment expenditure by local government entities and higher interest expenditure," the EC wrote. In 2011, Poland's general government deficit is seen falling to 6.6% of GDP due to consolidation measures enacted by the government which are expected to amount to about 1% of GDP. The EC also expects Poland's HICP inflation to amount to 2.6% in 2010 (vs. last year's 4.0%) , fuelled by elevated food and energy prices. "In 2011 it is forecast to grow further to 2.9%, reflecting developments in non-core components of the index and a rise in administered prices and indirect taxes," the document said. In 2012, the indicator should be 3.0%. The EC expects the unemployment rate (as measured by Eurostat) to rise to 9.5% in 2010 and to ease to 9.2% in 2011 and further to 8.5% in 2012 from last year's 8.2%. ISB
Main features of the EC's country forecasts for Poland
  2009 2010 2011 2012
GDP (% change) 1,7 3,5 3,9 4,2
private consumption (% change) 2,0 2,8 3,2 4,0
public consumption (% change) 2,0 3,5 -0,2 0,3
gross fixed capital formation (% change) -1,1 0,1 8,4 9,2
exports (% change) -6,8 10,0 6,9 7,7
imports (% change) -12,4 10,2 7,5 8,2
contribution to GDP growth: domestic demand 1,4 2,4 3,7 4,5
contribution to GDP growth: inventories -2,5 1,2 0,5 0,0
contribution to GDP growth: net exports 2,7 -0,1 -0,3 -0,3
employment (% change) 0,4 0,7 1,3 1,4
unemployment rate in Eurostat definition 8,2 9,5 9,2 8,5
HICP inflation 4,0 2,6 2,9 3,0
current-account balance as % of GDP -1,9 -2,7 -3,3 -3,7
general government deficit as % of GDP -7,2 -7,9 -6,6 -6,0
general government gross debt as % of GDP 50,9 55,5 57,2 59,6

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