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2021/03/16 / Erste Group Research

Poland Weekly Focus | Real economy data for February

Wage and employment statistics should confirm mostly unchanged picture of labor market. Improved sentiment suggests solid industrial production print for February. Retail sales are expected to remain negative. LCY yields and zloty are to follow core market development.

March 17 | Labor market to keep recent dynamics. February labor market statistics should confirm the relatively good situation on the Polish labor market and the figures should maintain the recent growth dynamics. We expect wage growth to arrive at 4.1% y/y, slightly below the market consensus of 4.9% y/y, while employment growth should land at -2.0% y/y. Furthermore, preliminary data of the Ministry of Development, Labor and Technology showed that the unemployment rate inched up by 0.1pp to 6.6% in February.

March 18 | Industry to benefit from improved sentiment. We expect industrial production growth to arrive at 3.2% y/y, slightly below the market consensus of 3.8% y/y, supported by improved sentiment. In February, the PMI index went up to 53.4, while local sentiment indicators increased as well. April and May readings will be characterized by high uncertainty and double-digit growth dynamics are likely, due to the low base from last year.

March 19 | Retail sales to stay in red. Despite the reopening of retail stores in shopping malls at the beginning of February, we expect retail sales to maintain negative growth dynamics and we see it at -1.2% y/y (vs. the market consensus at -2.5% y/y). Cancellation of the winter semester break for schools, which usually takes place in January-February, as well as the closure of restaurants and hotels, will weigh on the headline figure. Furthermore, consumer sentiment remains well below the pre-crisis level.

Bond market drivers | Pressure on long end eased. Over the course of the week, the long end of the Polish curve dropped by 10bp to 1.55%. As a result, the spread over the 10Y German Bund narrowed marginally to 185bp. The National Bank of Poland said in a statement that the recent increase in bond yields might weaken the bank’s efforts to keep borrowing costs low. Therefore, the NBP is considering to modify the way it conducts its asset purchases program by increasing its flexibility and frequency. Within its asset purchase program, the NBP has bought so far almost PLN 110bn in Treasuries and state-guaranteed papers.
FX market drivers | EURPLN locked above 4.58. Last week, the zloty was mostly unchanged and the EURPLN remains at the elevated level of around 4.58. The US dollar remains the key driver of the exchange rate ahead of the Supreme Court ruling on FX loans, due March 25. This week’s local macro release should not have a strong impact on the EURPLN, as investors focus on the FOMC meeting, which could influence the EURUSD.

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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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