EBRD upholds GDP forecasts for Poland

The European Bank for Reconstruction and Development (EBRD) has maintained its forecast of 3.2 percent Polish GDP growth for 2017 and 2018. “While the tightening labor market will likely continue putting pressure on wages, thus providing a further boost to consumption, the positive impact of the child benefit program on growth is largely over. Public sector investment will likely rebound, starting from the second half of 2017, though private investment still constitutes a higher risk to growth.”

The institution, however, warns about growing budget deficit. “the generous social spending and rebounding public capital expenditure coupled with a lower retirement age may lead to the breach of the 55 per cent public debt ceiling by 2019, in which case the public finance law effectively mandates a very significant fiscal tightening.”

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