Steady growth ahead

Poland's economy grew at 5.5 percent y-o-y in the second quarter this year, edging out market expectations of a 5.4-percent rise, for its highest increase in two years. Exports and consumer spending helped to lift GDP growth, but investments, which rose 14.4 percent - the highest growth since 1998 - led the charge. Economists now say that the investment figures prove a broader, more sustained type of economic growth - rather than an export-based recovery - is occurring in Poland.

"Companies have started to invest, which shows we have entered a mature phase of economic growth," said Jacek Kotłowski, an economist with BRE Bank in Warsaw.

Poland experienced such growth just as it was entering the EU more than two years ago, driven by a short-term burst in spending. Analysts said the situation was different this time around. "This picture looks very balanced. This time it seems to be the real thing," said Robert Beange, a regional economist with Lehman Brothers in London.

Experts now say that economic growth for the entire year is likely to beat the five-percent growth many had predicted earlier.

Following the announcement of the economic figures from the Central Statistical Office (GUS), Poland's central bank decided to keep interest rates steady at four percent, as the market had expected.

"This decision was expected since inflation is still below the lower end of the bank's 1.5-3.5 inflation target range," said Ryszard Petru, chief economist with Bank BPH in Warsaw. Most analysts expect the central bank to hold off on any rate rises until the beginning of next year.

Last month, CPI came in at a higher-than-expected 1.1 percent. (Reuters)