Poland may face deflation, weaker GDP growth – FinMin

Finance Minister Mateusz Szczurek Image : Ministry of Finance

Poland may face deflation, but its effects will not be severe, as Poland’s public sector, as well as private enterprises and consumers have far lower indebtedness than Western European countries. Finance Minister Mateusz Szczurek told Dziennik Gazeta Prawna.

The minister admitted that the government’s inflation forecasts are too optimistic. The Ministry of Finance expects average inflation for 2014 to come in at 1.2 percent and at 2.3 percent in 2015, according to the budget’s macro framework. “The inflation forecast in this year’s budget is too high, and problematic in the following year,” said Szczurek. The NBP sees inflation at 0.2 percent in 2014 and at 1.4 percent in 2015.

The low inflation will likely lower budget revenue in 2014 by PLN 1.5-2 billion.

He also added that GDP growth wasn’t as strong in the second quarter of this year as in the first. “At the beginning of the year our estimates of GDP growth at 3.3 percent were seen as overly cautious, pessimistic even. Now, after the latest PMI, industrial output and retail sales data, the 3.3 percent has become quite likely,” said Szczurek.

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