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2017/08/28 / Erste Group Research

Weekly Focus Poland


GDP structure, flash CPI and PMI to be published this week. As for GDP breakdown, most watched information to be investment performance. We expect marginal rise in inflation rate in August and market consensus points to rebound in PMI. Friday’s speeches from Yellen and Draghi resonated on local bond and FX markets.

August 31: 2Q17 GDP structure: while private consumption remained strong, has investment recovered? The flash estimate of 2Q17 GDP growth arrived at 3.9% y/y and on Thursday the structure of growth will be published. While there is little doubt about the strong growth in private consumption, investment growth remains a question mark despite the rebound in construction output growth. Weak investment activity should be worrisome, as consumption growth may lose some of its dynamics as the PLN 500+ effects begin to fade in 2H17.

August 31: Flash CPI should show marginal increase of inflation rate to 1.8% y/y in August, in line with market consensus We expect the inflation rate to increase from 1.7% y/y in July to 1.8% y/y in August due to rising commodity prices. We see risks to the upside to our point forecast stemming from growing food prices.

Yields dropped below 3.3% Last week, Yellen’s and Draghi’s speeches were the key events for the bond market. No new details on the monetary policy direction in either the US or Eurozone were delivered and yields dropped marginally on core markets. This movement was reflected on the Polish bond market, as the long end of the curve went below 3.3% on Friday. GDP structure and flash CPI are due Thursday; however, Eurozone inflation and PMI as well as US data due Friday are likely to attract more attention.

Jackson Hole delivered positive impulse for zloty The zloty gained at the end of the week in response to Yellen’s and Draghi’s speech and the EURPLN moved toward 4.25. GDP structure and flash CPI will be published this week. As the flash estimate has already been published (3.9% y/y growth in 2Q17) the data should be neutral unless there is major disappointment about investment activity. Apart from that, the zloty will remain sensitive to global sentiment, especially as important releases are scheduled in the Eurozone and US.

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General information

AuthorErste Group Research
Date2017/08/28
Languageen
Product nameCEE Country Update
Topic in focusFX, Macro/ Fixed income
Economy in focusPoland
Currency in focusPolish Zloty
Sector in focus-
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