Bloomberg News

Polish Output Growth Quickens to 4.6% in May, Tops Forecast

June 20, 2012

Polish industrial-output growth unexpectedly accelerated in May, suggesting the European Union’s biggest eastern economy is withstanding Europe’s debt crisis.

Production rose 4.6 percent from a year earlier, compared with a 2.9 percent increase in April, the Central Statistics Office in Warsaw said today. That exceeded the 2.5 percent median estimate in a Bloomberg survey of 22 economists. Output rose 4.5 percent from the previous month.

Manufacturing expanded for the 31st consecutive month, suggesting that producers are coping with an economic slowdown in the euro region, which buys two-thirds of Poland’s exports. The economy will expand 2.7 percent this year, the fastest pace in the 27-nation bloc, according to the European Commission.

“We’re getting a bounce-back reaction from very weak April data,” Agnieszka Decewicz, a Warsaw-based economist at Bank Zachodni WBK in Warsaw, said by phone after the release. “The figures don’t change the big picture of a gradual slowdown in coming months and certainly don’t suggest the need for another rate increase.”

Poland’s central bank was the first in the EU to raise borrowing costs this year when it increased its benchmark rate by a quarter-point to 4.75 percent in May. Resilient growth and inflation which has remained above the central bank’s 2.5 percent target since October 2010 make an interest rate increase “very likely” next month, Adam Glapinski, a member of the central bank’s Monetary Policy Council, said last week.

‘Mild’ Slowdown

“The euro region has stagnated, but decent economic activity in Germany has played a major role in strengthening Poland’s resistance to the euro-area crisis,” Glapinski said, calling Poland’s economic slowdown “mild.”

The EU is battling to staunch a debt crisis that is threatening to trigger another global slowdown. Germany, Poland’s biggest trading partner accounting for a quarter of exports, posted the steepest decline in economic sentiment since 1998 yesterday. The euro region will contract 0.3 percent this year, according to forecasts from the commission on May 11.

Producer prices, an early indicator of inflationary trends, rose 5 percent from a year earlier in May, matching the median forecast in a Bloomberg survey of 15 economists, the statistics office reported today in a separate statement. Producer prices rose 0.2 percent on the month.

The zloty strengthened after the data release to 4.2379 per euro at 2:20 p.m. in Warsaw, 0.1 percent stronger on the day. The yield on the five-year government bond due in 2017 was 4.79 percent, down 6 basis points from yesterday after yields on the maturity fell to a six-year low at auction today.

-- Editors: Alan Crosby, Jeffrey Donovan, David McQuaid

To contact the reporters on this story: Dorota Bartyzel in Warsaw

Aaron Eglitis in Riga at

To contact the editor responsible for this story: Balazs Penz at

China's Killer Profits
blog comments powered by Disqus