Industrial output slumps in July, sagging domestic demand and exports blamed

The Central Statistical Office (GUS) said industrial output growth slowed in July to 7.8% year-on-year from June's 13.5%. According to GUS production costs increased only 0.5% in July compared to 1% in June. Year-on year it increased 8.9%, which is the same as in June. "Increase in product prices is still to be seen, but it is not strong enough to affect the decision about increasing interest rates," said Krzysztof Rybinski from ING Barings. Production costs may increase more rapidly as of September due to an increase in fuel excise duty. "Industrial slow down is just a matter of seasonal policy, when companies decrease production due to the holiday period," said Citibank economist Katarzyna Zajdel. Some say that industrial output was affected by decreasing domestic demand or exports. (Gazeta Wyborcza, Aug. 19-20, page 30, Prawo i Gospodarka, Aug. 19-20, page 1, 2, Reuters)