Turning the corner
Data from the Central Statistical Office, GUS, shows that retail sales rose strongly year-on-year, by eight percent. Still, it was not enough to convince the market that Poland was out of the economic soft patch indicated by weak GDP and investment growth in the first quarter. While the yearly growth in retail sales was high, on April, May's increase was meager.
"In a year-on-year comparison [retail sales] look impressive, but month-on-month growth was merely 0.2 percent," said Marcin Mrowiec, an economist at Bank BPH.
Still, analysts said the retail figures were a sign that consumer demand was improving, fueled by the fact that companies are beginning to hire again. Unemployment in Poland dropped in May to 18.3 percent, from 18.8 percent in April.
"These figures signal a constant and moderate improvement in demand. If inflation falls, we will have a real increase of purchasing power," said Bank PKO BP economist, Łukasz Tarnawa.
However, GUS warned that there was still no sign of the investment boom expected to hit this year, strengthening the case for an interest-rate cut.
"I think that this [investment increase] will happen, but economic data after May did not provide signals about such an impulse, we don't see it yet," said Halina Dmochowska, GUS' deputy president.
Recently released production figures were also a disappointment. Output in May rose just 0.9 percent y-o-y, well below expectations. Hence, most analysts are expecting a rate cut of at least 25 basis points in the central bank's benchmark rate from the current 5.5 this week, but some believe the case can be made for a 50-point cut. (Reuters)
"In a year-on-year comparison [retail sales] look impressive, but month-on-month growth was merely 0.2 percent," said Marcin Mrowiec, an economist at Bank BPH.
Still, analysts said the retail figures were a sign that consumer demand was improving, fueled by the fact that companies are beginning to hire again. Unemployment in Poland dropped in May to 18.3 percent, from 18.8 percent in April.
"These figures signal a constant and moderate improvement in demand. If inflation falls, we will have a real increase of purchasing power," said Bank PKO BP economist, Łukasz Tarnawa.
However, GUS warned that there was still no sign of the investment boom expected to hit this year, strengthening the case for an interest-rate cut.
"I think that this [investment increase] will happen, but economic data after May did not provide signals about such an impulse, we don't see it yet," said Halina Dmochowska, GUS' deputy president.
Recently released production figures were also a disappointment. Output in May rose just 0.9 percent y-o-y, well below expectations. Hence, most analysts are expecting a rate cut of at least 25 basis points in the central bank's benchmark rate from the current 5.5 this week, but some believe the case can be made for a 50-point cut. (Reuters)
