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2020/01/27 / Erste Group Research

Weekly Focus Poland | Economy slowed down in 2019

Flash estimate of FY19 GDP growth to be in focus. We see figure at 4.2%. Slippage towards 4.1% cannot be ruled out, due to weaker than expected industrial performance in December. Markets to watch for news concerning judicial reform.

January 29 | Economic growth to slow down in 2019. We expect the flash estimate of 2019 GDP growth to be 4.2%, down from 5.1% in 2018. Weaker than expected performance of industry at the turn of the year could have dragged GDP growth below 3.5% in 4Q19. Our now-casting model suggests GDP growth at 3.6% y/y in the last quarter of 2019. Therefore, slippage of the FY19 figure to 4.1% cannot be ruled out.

Bond market drivers | Long end followed global news. The long end of the Polish curve peaked at the beginning of the week close to 2.35% and moved towards 2.25% over the course of the week, reflecting global developments. Market uncertainty related to the spread of the coronavirus, as well as comments from Christine Lagarde that there are still downside risks to the Eurozone economy, pushed safe haven assets down.

FX market drivers | Supreme Court ruling pushed EURPLN up. On the back of weaker than expected economic data as well as the ruling of the Polish Supreme Court concerning the judicial reform undertaken by Law and Justice in 2018, the EURPLN weakened to 4.26. Last week’s ruling calls into question the independence of the National Council of the Judiciary (KRS) and is in conflict with government opinion. The decision of the Supreme Court could inflame the ongoing dispute between the Polish government and the European Commission regarding the rule of law.

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General information

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


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