Polish GDP seen growing 2.9% y/y in 2014
February 26, 2014
The Polish economy is expected to grow by 2.9% y/y in 2014 and accelerate to 3.1% in 2015, the European Commission said in its winter forecast.
"The improving economic outlook in the main trading partners and the resulting pick-up in Polish exports are set to invigorate private investment and the labor market, which in turn is expected to support the recovery of private consumption," the report read.
Risks to the EC scenario "are broadly balanced" with a weaker currency further boosting exports and enhancing import substitution on the upside and possible pick-up in inflation, which "might dent real disposable incomes and slow down private consumption growth," the EC expects.
On the fiscal front, in 2014, the general government budget balance is projected to turn into a surplus of 5% of GDP under ESA95 as asset transfers by private pension funds OFE are treated as revenue, while under ESA2010 methodology, which will come into force this autumn, Poland would record a deficit of 3.8% as these transfers will no longer count as revenue.
"In 2015, due to the one-off nature of the large improvement in 2014, the general government budget balance is expected to return into the red, posting a deficit of 2.9% of GDP under ESA95," the EC wrote.