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2018/08/20 / Erste Group Research

Weekly Focus Poland

We expect retail sales to sustain solid growth of around 7% y/y in July, supported by strong wage growth. Unemployment rate most likely to remain at historically low level of 5.9% y/y in July. This week’s macro releases should be neutral for bond market. Zloty to remain affected by global sentiment.

August 22: retail sales to sustain solid growth in July. We expect retail sales growth to arrive at 7.5% y/y in July (market consensus stands at 9.5% y/y). Solid growth of wages (up by 7.2% y/y in July) supports household spending, which in turn supports retail sales. In the period from January to June 2018, retail sales growth has been marginally lower than in 2017, as it increased by almost 8.0% y/y vs. 8.5% y/y the year before. We see retail sales growth at 7.5% y/y in 2018. Hence, private consumption will remain one of the main GDP growth drivers. The detailed structure of GDP growth in 2Q18 will be published at the end of the month. The retail sales figure for July will enable us to run the now-cast model for GDP growth and we might revise our FY18 growth forecast upwards.

August 24: unemployment rate to remain at record low level. We see the unemployment remaining at the record low level of 5.9% in July. Despite somewhat disappointing figures regarding the growth of employment (up only by 3.5% y/y in July), the unemployment rate should remain stable, supported by seasonal factors.

10Y yields remained stable at around 3.15%.
The long end of the curve remained rather stable last week after the
significant change that had been observed the week before due to
Turkish lira turbulence. The 10Y yield fluctuated around 3.15%, with a
marginal decrease toward 3.14% at the end of the week. The spread vs.
10Y German Bund remained stable at around 283bp. This week, local
macro releases should remain neutral for the bond market.

Zloty moved around 4.31 vs. EUR.
The Polish zloty remained resilient to pressure during the last week of
turbulence experienced by the Turkish lira. The public holiday on
Wednesday last week limited supply, which caused the zloty to move
above 4.34 vs. the EUR. However, it moved toward 4.31 during the
second half of the week. Moreover, the weaker USD and local macro
releases (GDP and inflation figures) were zloty-positive. The zloty will
most likely remain affected by global sentiment this week.

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General information

AuthorErste Group Research
Product nameCEE Country Update
Topic in focusFX, Macro/ Fixed income
Economy in focusPoland
Currency in focusPolish Zloty
Sector in focus-


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