Q2 growth was stunning, but is the economy overheating?

"The result is impressive. It turned out that investments were growing much faster than market forecasts, while individual consumption - slower. The biggest surprise is the growth of inventories, which boosted GDP. Its share in the composition of GDP stood at 1.9%," said Monika Kurtek, economist with Bank BPH. However, foreign trade data was a little disappointing as the foreign trade balance lowered the GDP by 2.6%. "If we add a poor, that is below 8% growth of exports, it turns out that the economy is becoming more expensive and is heating up," said ING's economist Bartosz Pawłowski. Finance Minister Zyta Gilowska however is calm, as she believes there decreasing pressure on the growth of prices and the perspectives for the following quarters are good. Her opinion is not shared by Marian Noga of the Monetary Policy Council (RPP) who said, "This data shows that inflationary pressure is increasing. I believe that the level of interest rates that will ensure the inflationary goal should stand at 5.5%. This means three interest rates increases by the middle of 2008". (Puls Biznesu, p. 10) M.M.