Ministry of Treasury Poland’s GDP growth – summary of 2011 and forecasts for 2012 - Economic News -


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Poland’s GDP growth – summary of 2011 and forecasts for 2012

Published: 10.01.2012

2011 – economic growth estimated at some 4%

Polish economy maintained a relatively high pace of economic growth in 2011. Poland’s gross domestic product (GDP) grew 4.4% in Q1, 4.3% in Q2 and 4.2% in Q3, according to data of the Polish statistics office GUS.

The slight downward trend probably continued in Q4 – even though GUS has not yet published its official estimates of GDP figure for Q4, the office’s chairman Janusz Witkowski expected in his December interview for PAP that “the fourth quarter will be slightly worse than the third one.” However, the full-year growth at the level of 4%, “is not threatened,” Witkowski added.

It is precisely 4% that is the economic growth rate for 2011 officially assumed in Poland’s draft 2012 budget.

The same figure is forecast by the European Commission. According to its prognoses, Poland’s GDP growth rate of 4.0% in 2011 would rank the country fourth amidst all the 27 EU member states, behind the Baltic States and level with Sweden. Such a result would also be significantly higher than both the forecast average for the EU (1.6%) and the average for the eurozone countries (1.5%).

Polish economists surveyed by PAP in December are slightly more optimistic: the average of sixteen forecasts for Polish GDP growth in 2011 amounts to 4.1%.

Polish GDP growth in subsequent quarters of 2011 (year on year)
Polish GDP growth in subsequent quarters of 2011 (year on year)
Source: GUS - Central Statistical Office (*PAP)

2012 will likely bring a slowdown

This year, Polish economy is expected to grow slower than in the previous one – this is a consensus of all major forecasting institutions, the only difference between them consisting in the predictions of the scale of the slowdown.

In Poland’s draft 2012 budget, approved by the Cabinet in the first half of December, the assumed growth rate is 2.5%.

Again, the Polish government’s assumptions are identical to the ones by the European Commission. The EC’s forecasts indicate that Poland’s 2.5% GDP growth in 2012 would be the third best result (level with Latvia) among the EU’s national economies. To compare: the GDP of all the EU member states is seen growing in 2012 by 0.6%, while the respective indicator for the seventeen countries of the eurozone is eyed at the level of 0.5%, the EC’s report published on November 10 reads.

Forecast 2012 GDP growth in the EU member states
Forecast 2012 GDP growth in the EU member states
Source: European Commission

Poland’s local economists, in turn, anticipate that the Polish economy will increase by 2.9% in Q1 2012 and envisage the respective full-year figure at the same level, according to the collective expectations voiced by economists surveyed by PAP in December.

Foreign banks and international institutions seem to be more cautious in their forecasts – the indications of the majority of them range from 2.0% (the rate expected e.g. by Goldman Sachs bank) to 2.8% (the reading eyed by Nomura or Danske Bank). The International Monetary Fund (IMF), alongside OECD and UBS, forecast a 2.5% growth.

Polish GDP growth forecasts by foreign banks and institutions
Source: PAP own data prepared upon reports of banks

International environment seen as a source of uncertainty

It is worth noting at this point that the IMF, in its statement released at the beginning of December, makes a reservation that the forecast of Poland’s economic growth in 2012 is “burdened with a very high uncertainty” which is connected with bottom-up risks resulting from “the worsening situation in [Poland’s] environment”.

A similar message has been sent by international rating agencies. Leila Butt, sovereign rating group director at Standard & Poor’s, while speaking at a conference on December 14, underscored the dependence of Poland’s GDP growth from the economic growth in the eurozone, saying that S&P’s forecast of Polish economy growth of 2.0% in 2012 is based on the assumption that the GDP of the eurozone in the respective period will grow 0.4%. "If the euro zone is hit by recession, Poland's economic growth will be lower," she added. The conviction that the risks to the Polish GDP growth come from the country’s environment and not the country itself seems to be supported by Poland’s rating outlook at S&P’s, which remains stable. If the Polish government continues fiscal consolidation, the credit outlook may even be raised to 'positive', Butt said. Standard & Poor’s rates Poland 'A-' in foreign currency and 'A' in local currency.

Rating agency Fitch also maintains Poland’s rating at 'A-'. Fitch Ratings’ head of operations in the country, Piotr Kowalski, told PAP in an interview given on November 25 that risks for Poland’s rating are balanced, with the rating having some upside potential rather than the downside one, following Prime Minister Donald Tusk’s November exposé. And even though, as Kowalski pointed out, “the situation in Europe is difficult, and is rather rapidly changing towards more unfavorable, which will have an influence on Poland”, the country stands a chance to go through the current crisis in a rather advantageous manner. "Our [Polish] economy has a favorable structure. We are not dependant on exports as strongly as our southern neighbors, we have industrial output, large domestic market and active consumers – and this constitutes an advantage for us,” Fitch Poland’s head told PAP.

Source - Polish Press Agency, Economic Service


Published by: Agnieszka Steindl
Author: Department of Investor Relations
Last change: 10.01.2012 , 20.01.2012 Agnieszka Steindl