MPC members split on extend of economic slowdown in Poland.

By bne IntelliNews August 24, 2012
The current data on economic activity as well as business climate indicators pointed to further slowdown in domestic economic growth in Poland, according to some members of the Monetary Policy Council (MPC), as reported by the central bank in the "minutes" of MPC's July sitting. According to those members of the Council, weaker business climate indicators about the expected economic conditions, in particular regarding outlook for demand, orders and production, were a sign of adverse prospects for domestic economic activity. Yet, few MPC members said that the recently incoming data indicate rather a slight economic downturn. Those Council members pointed to some strengthening of industrial output and retail sales growth in May (that could be driven not only by one-off factors, such as football tournament Euro 2012), a sustained strong financial standing of firms and an improvement in liquidity indicators in the corporate sector in Q2 of 2012, as showed by the NBP surveys. Some Council members emphasised that the projection envisaged further economic slowdown - deeper than forecast in the March projection. A few MPC members deemed economic growth in the coming years likely to run markedly below the levels assumed in the NBP projection. At the same time, other central bankers deemed that following a marked slowdown this year, GDP growth may gradually pick up in the course of 2013. Under the July projection of NBP, Poland's economic growth will amount to 2.9% in 2012 (vs. 3.0% expected in March), while it will slow down to 2.1% in 2013 (vs. 2.3% expected in the March projection). In 2014, the GDP growth will accelerate to 3.0% y/y (vs. 3.2% projected in March and compared to last year's 4.3%).

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