Moderate threats

The average private-sector wage in July stood at zł.3,229, 11.6-percent higher than last year, according to data from the Central Statistical Office (GUS). This was is in line with analysts' expectations. At the same time, employment also grew at a fast pace, with 4.7 percent more people employed in July 2008 than in the corresponding period of last year, beating forecasts by 0.2 percent.

"In Q2 2008, economic growth was close to 5.5 percent, and this quarter is unlikely to witness a significant slowdown. [Instead] there is a very minor downward trend the whole time," Dariusz Filar, member of the Monetary Policy Council (RPP), told Puls Biznesu.

Analysts at BZ WBK believe that good construction output in July, which rose by 16.9 percent y/y, suggests that Q3 investment dynamics shouldn't weaken too much. "It gives us hope that the economic slowdown will be a very moderate process," BZ WBK experts commented in response to the latest GUS data. 

The positive outlook for the economy is also supported by 16.1-percent export growth in June. "There are no signs of significant threats to exports. Small producers are regretfully in a difficult situation, but there is no significant weakness for the economy as a whole," said Filar. In his opinion, the data confirm no signs of diminishing inflationary pressure, as unit labor costs are rising and there is thus no reason to relax fiscal policy.

According to Katarzyna Zajdel-Kurowska, a deputy minister of finance, GDP should not drop below 5.5 percent for the year.