Weekly Market Analysis 30.06.09

The most important macroeconomic data for Poland this week – an inflation estimate by the Ministry of Finance and the PMI index - will be released on Wednesday. We expect that CPI inflation increased from 3.6% y/y in May to 3.7% y/y in June due to a rise in fuel prices. We also estimate that PMI reached 43.0 points in June versus 42.55 points in May. The slight improvement in PMI is expected because economic conditions have improved in the euro zone.

Monetary Policy Council cuts interest rates by 25 basis points
As expected, the Monetary Policy Council has cut interest rates by 25 basis points. The reference rate is now at a record low level of 3.50%. When taking the decision on interest rates the Council took account of an updated inflation and GDP projection.

Government to increase budget deficit to PLN27 billion
Polish Minister of Finance Jacek Rostowski has announced that in the amendment to the 2009 budget law to be made in early July the budget deficit will be raised to PLN27 billion from the present PLN18.2 billion. In the draft amendment, the government has assumed a conservative growth figure of 0.2%.

Retail sales grow in May
Retail sales grew in May by 1.1% y/y in nominal terms after an increase of 1.0% y/y a month before. In real terms, retail sales dropped for a fourth consecutive month; this time by 0.5% y/y. Private consumption has been slowing for a few months now.

Last week on financial markets
Last week the zloty strengthened slightly to major currencies and was less volatile than in the past few months. Rapid changes in exchange rates were only noted at the beginning of the week due to sharp drops on stock markets. The WIG-20 index dived over 6% as sentiment on emerging markets deteriorated. As a result, the zloty weakened. In the later part of the week the zloty was gradually gaining against all major currencies and on Friday was stronger than at the beginning of the week.

Polish Market

ECONOMIC MONITOR

download pdf

• ● In December 2009 and January 2010, as in previous months in the second half of 2009, the Polish economy stood out against other countries in terms of GDP growth. Poland’s economic growth was higher than projected and higher than in other European countries.
read more »

• In 2009 construction output increased by 3.7%.
read more »

• Retail sales increase in most product groups.
read more »

• On the Warsaw Stock Exchange, stock prices were very volatile in January 2010.
read more »

• At the end of December 2009 the registered unemployment rate (claimant count rate) amounted to 11.9% versus 11.4% in November.
read more »

• At the end of January the president signed the 2010 budget bill into law. The bill was adopted by the parliament on December 18.
read more »

• In the fourth quarter of 2009 the Polish economy turned out to be more resistant to the global crisis than had been projected and than the economies of Polish neighbours, something which boosts optimism in forecasts for 2010 and the next years.
read more »

PODCAST

• Poland and China: two partners unscathed by the crisis

• Polish artist turns around Polish-Jewish stereotypes

• Unconventional natural gas – Poland’s secret weapon

• Shock and outrage at Warsaw underground ‘saucy sheep’ mural

• Gdansk reinvents Elizabethan theatre tradition

• Poland kicks off Chopin Year

COMING UP

Fraud Risk Management >>

WEEKLY MARKET ANALYSIS

The last portion of macroeconomic data for January will be released on Friday when the National Bank of Poland (NBP) is expected to publish balance of payments figures. We estimate that the current account deficit reached EUR580 million while the consensus of the “Parkiet” daily is EUR614 million. We expect that growth in exports slowed slightly in January to 10.9% y/y. We also predict that imports had already made up for last year’s losses and rose by 7.7% y/y in January.

MARKET INFO