Economic Analysis

In today's Eyeopener:

- Today, euro area GDP data, Hungarian industrial output data, and a batch of US figures
- Adma Glapiński has not ruled out further interest rate cuts
- Slight weakening of the zloty and a minor rise in bond yields

The coming week will be very quiet in terms of new data releases. The domestic calendar is virtually empty, while abroad we’ll see, among others, Germany’s foreign trade data, industrial production in selected European countries, as well as Czech, Hungarian and German inflation for November.
The atmosphere should be enlivened by the publication of our MACROscope report with updated forecasts for 2026, which we plan to release at the start of the week.
Global markets’ attention will focus on the last FOMC meeting of the year (...)

NBP president Adam Glapiński kept the door open for further monetary easing at today’s conference. He said the MPC is now likely to enter a wait-and-see mode to observe the situation for some time, but then it may resume cutting rates, if the data allow.

The next central bank’s decisions will remain strongly dependent on the new data and next NBP projections. Glapiński said his own view is quite conservative and he would be happy with maintaining the current 4.0% reference rate (which is “perfect”) for a longer period, but other MPC members may prefer to cut interest rates a little more, possibly to 3.75-3.50%. (...)

Despite the high volatility in high-frequency economic data, the trend of the domestic economy appears to remain moderately positive. Our forecasts suggest that after disappointing August publications, September data will show a clear improvement across most indicators. This will be partly due to calendar effects and an exceptionally weak base – recall that in September 2024, the domestic economy was dealing with the aftermath of floods and a difficult-to-explain collapse in retail sales data. Nevertheless, even after adjusting for these effects, we should see signs of further gradual improvement in economic conditions. GDP growth in 3Q (the preliminary figure will be released in mid-November) is likely to accelerate again to 3.6–3.7% y/y, confirming that the full year may close with growth near 3.5%, possibly with a slight upside risk. (...)

In September's Rates and FX Outlook:
 

• Poland’s GDP growth failed to accelerate in 2Q16, with investments surprising negatively (-4.9% y/y), and we think that the second half of the year will see no significant improvement in economic growth. Although private consumption is likely to gain strength in the coming quarters, supported by solid labour income and the new child subsidies, it may take time until investments recover, and the positive impact of net exports will be hard to maintain (export growth may decelerate and imports accelerate). We expect a more significant investment pick-up next year, but by then the impact of the 500+ child benefit programme on consumption will be dissipating. Therefore, we forecast that GDP will grow 3.1% in 2016 and 2.9% in 2017.