Bloomberg News

Polish 2012 Growth Will Be Fastest in EU, Commission Says

February 24, 2012

(Updates with Polish manufacturing data in fourth paragraph and zloty in fifth.)

Feb. 23 (Bloomberg) -- Poland, the European Union’s largest eastern member, will post the 27-nation bloc’s fastest economic growth this year, driven by corporate investment,the European Commission forecast.

Gross domestic product will grow 2.5 percent, with quarterly expansion of about 0.5 percent during the year, the EU’s executive arm said in a statement today. Spending on road and rail upgrades for the Euro 2012 soccer championship will help boost the pace of growth, it said.

“Investment spending growth is expected to remain robust, supported by accelerating private investment,” the commission said. “The corporate sector is likely to continue to increase capacity, financed by intensifying inflows of foreign capital, retained earnings and growing corporate credit.”

The EU’s forecast is in line with a prediction by Polish Prime Minister Donald Tusk’s government. Poland is weathering the “mild recession” predicted for the 17-nation euro region, its biggest trading partner. The purchasing managers’ index, a gauge of manufacturing, rose to the highest level in eight months in January and industrial-output growth accelerated last month to the fastest in 11 months.

The zloty has strengthened 6.6 percent against the euro this year, the third-best performance of about 170 currencies tracked by Bloomberg. The currency was 0.3 percent higher at 4.1887 per euro at 12:07 p.m. in Warsaw today.

The commission kept Poland’s growth estimate unchanged from its autumn forecasts, while it downgraded the projection for the three Baltic countries.

Estonia’s economy, the fastest-growing country in the EU last year, will probably expand 1.2 percent this year, compared with the previous forecast of 3.2 percent growth, as exports will stay weak in the first half, the commission said. Lithuania, the biggest Baltic economy, and Latvia will probably expand 2.3 percent and 2.1 percent, respectively, the fastest rates behind Poland.

--Editors: Balazs Penz, Hellmuth Tromm

To contact the reporters on this story: Agnes Lovasz in London at alovasz@bloomberg.net; Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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