Bloomberg News

IMF Cuts Polish 2012 GDP Forecast on Euro-Area Recession

April 17, 2012

The International Monetary Fund trimmed its forecast for Poland’s economic growth this year to 2.6 percent from 3 percent in a September report as the euro area’s debt crisis weighs on trade and lending growth.

The Washington-based lender also raised its estimate for Poland’s annual average inflation to 3.8 percent in 2012 from its previous prediction of 2.8 percent. The economy will expand 3.2 percent next year with inflation averaging 2.7 percent, the IMF projected.

While Poland will post Europe’s second-fastest growth in 2012 after Russia, it won’t be immune from a forecast contraction of 0.3 percent in the euro area, the IMF said. Cross-border production chains have tied the region’s trade to the euro area and especially to Germany, while western European banks cut their exposure to eastern Europe by almost 5 percent in the third quarter of 2011, curbing local access to credit, the fund said in its World Economic Outlook.

“Reflecting these spillovers, and notwithstanding improved euro-area sentiment, growth in eastern Europe is expected to slow sharply this year, and downside risks are significant,” the report said.

To contact the reporter on this story: David McQuaid in Warsaw at dmcquaid@bloomberg.net

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


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