Moody’s predicts higher GDP growth, inflation for 2017

The international credit rating agency Moody’s may not have upgraded its rating for Poland this week, as many had hoped, but it did release some relatively optimistic predictions for the country’s economy for 2017. According to a report released to the press on Wednesday, Moody’s maintained its forecasts for GDP growth, as well as for the indicator measuring public finance deficit-to-GDP. The forecast covered both 2017 and 2018. The agency stated that it expects GDP to increase by 2.9 percent in 2017, and by 2.8 percent in 2018, which is slightly lower than predictions made by some other international organizations, such as the IMF. Earlier on Wednesday, the IMF had predicted an increase in GDP growth of 3.3 percent for 2017. Moody’s also said that it expected the deficit-to-GDP ratio to be slightly higher than Polish government forecasts. It predicts a 3.2 percent reading, which is above the government’s planned 2.9 to 3.0 percent – a figure it must maintain in order to be in line with the European Union’s requirement of maximum 3 percent deficit-to-GDP. With respect to inflation, the agency revised its estimate upward. Moody's estimates that consumer prices in Poland at the end of December 2016 increased by 0.8 percent, y/y, compared to 0.1 percent during the previous month. It expects consumer prices to rise by 2.0 percent by the end of 2017, and by 2.5 percent (y/y) at the end of 2018.