Growth to slow say experts on the CASE
CASE also forecasts that the Monetary Policy Council (RPP) will raise interest rates by another 50bps this year and estimates the GDP growth rate at 6.0% in Q2, in line with the central bank's forecast.
This means growth will slow down as compared with Q1 (6.9%), but it also harbingers a more advantageous growth structure: faster growth of investment outlays (about 5%) and a better position vs. foreign trade. Stock growth, however, will be much lower than in Q1.
CASE experts suggest that in the second half of 2004 the average growth pace of GDP will be similar to that in the first half of the year because Poland's accession to the EU will still translate into higher demand for Polish exports.
The government expects GDP to grow 5.8% this year and 5.0% in 2005, compared to 3.8% in 2003.
CASE believes the inflationary expectations will relax at the turn of the year and will not result in a wage/price spiral.
But the inflation report published by the National Bank of Poland (NBP) forecasts the opposite.
CASE economists also project that the lower inflation and slower economic growth next year may result in an interest rate cut equal to 25bps in the second half of 2005. As a result, the level of NBP's real interest rates will return to the 2003/2004 level of about 3%.
The RPP has raised interest rates three times this year, by 50bps in June, by 25bps in July, and by 50bps in August. The main reference rate is now 6.50%, while the Finance Ministry expects a boost to over 7.0% (average) in 2005. (ISB M.W.)
This means growth will slow down as compared with Q1 (6.9%), but it also harbingers a more advantageous growth structure: faster growth of investment outlays (about 5%) and a better position vs. foreign trade. Stock growth, however, will be much lower than in Q1.
CASE experts suggest that in the second half of 2004 the average growth pace of GDP will be similar to that in the first half of the year because Poland's accession to the EU will still translate into higher demand for Polish exports.
The government expects GDP to grow 5.8% this year and 5.0% in 2005, compared to 3.8% in 2003.
CASE believes the inflationary expectations will relax at the turn of the year and will not result in a wage/price spiral.
But the inflation report published by the National Bank of Poland (NBP) forecasts the opposite.
CASE economists also project that the lower inflation and slower economic growth next year may result in an interest rate cut equal to 25bps in the second half of 2005. As a result, the level of NBP's real interest rates will return to the 2003/2004 level of about 3%.
The RPP has raised interest rates three times this year, by 50bps in June, by 25bps in July, and by 50bps in August. The main reference rate is now 6.50%, while the Finance Ministry expects a boost to over 7.0% (average) in 2005. (ISB M.W.)
