Polish output data signals slowing economy

Poland's statistical office (GUS) released October output data confirming a rapidly cooling economy and labor market slowing to an annual 0.2 percent, below market expectations. On the month, industrial output rose 2.9 percent, down from the sharply revised figure of 17.2 percent in September.

According to the data, produce price index rose 2.4 percent year-on-year in October, while net inflation rose 4.5 percent year-on-year in October.

Analysts agreed that the output data confirmed that economic growth is slowing. "This data confirms the economy is slowing but doesn't yet show the depth of the slowdown as it probably does not mirror exactly how Polish companies are reacting to the crisis," Piotr Bielski, economist at Bank Zachodni WBK told Reuters.

They believe that the output data will worsen in the coming months and believe that the results might influence the Monetary Policy Council to cut interest rates. But most economists expect MPC to keep rates the same in November and December, with the first cut expected in first quarter of 2009. (AO)

Source: GUS, Reuters