Reply #41: Polish economy grows 6.5%

[Ghost Dog]

Poland’s economy grew by 6.5 per cent last year, the fastest pace in a decade, the country’s statistical agency reported on Wednesday, a figure that matched analysts’ expectations.

Jozef Olenski, the agency’s head, attributed the performance to strong production and construction, particularly residential building, which boomed last year. Investments for the year also rose by 20 per cent

However, gross domestic product growth is expected to slow this year to about 5 per cent, said Piotr Kalisz, chief economist for Citi Handlowy, the Polish affiliate of Citibank.

“We can see a significant slowing compared to last year, but for Poland 5 per cent is about the natural level of growth,” he said. “Growth above that means an increase in inflationary pressures.”

Recent strong growth has pushed inflation to 4 per cent. Companies are also reporting increasing problems in finding workers and public employees are threatening strikes as they try to catch up with private sector wages, which rose by about 12 per cent last year.

The stresses on the economy caused by fast growth prompted the central bank’s interest rate setting Monetary Policy Council to raise rates by a quarter point on Wednesday to 5.25 per cent. The council began a tightening cycle last April, raising rates five times.

/... http://www.ft.com/cms/s/0/a710b3c2-cf33-11dc-854a-0000779fd2ac.html