3 days ago
February retail sales disappointed
Retail sales rose by 5% yoy in February, slightly below market consensus and our assumptions. Retail sales were likely adversely affected by weather conditions which were unfavourable to shopping (very low temperatures). Nevertheless, this is the last postcard sent by Polish consumers from before the outbreak of the Gulf War. The picture painted by this data is middling. In the coming months, a combination of relatively low growth in nominal incomes and rising inflation will constrict the purchasing power of Polish consumers further. We expect consumption to slow to 3.2% this year, with risks to the downside.
1 week ago
Winter's grip on Polish economy eased somewhat in February
According to the data published today, industrial production rose by 1.5% yoy in February, while construction output fell by 13.7% yoy. In both cases, this marks an improvement compared to the extremely poor January. Nevertheless, the weakness in construction production, driven by weather conditions, will weigh on Poland’s economic growth in the first quarter. The delay in construction investment is one of the reasons why we decided to lower GDP growth forecasts for this year (from 4.0 to 3.8%).
1 week ago
A cold February in the Polish labour market
Wage growth in the enterprise sector remained unchanged in February at 6.1% yoy, significantly below the consensus estimate (6.6%). This provides strong support for our forecast for the current year (5.5%). Wage pressure is set to remain subdued, and any potential inflation rebound related to the conflict in the Middle East should not translate into stronger wage growth, given the weakening bargaining power of employees. In fact, the impact of the conflict on wages is likely to be the opposite due to slight deterioration of economic conditions. Meanwhile, employment declined by 0.8% yoy in February, in line with expectations.
1 week ago
Poland gets an EM treatment
This will be a busy week, even though macroeconomic events remain in the back seat. In Polish macro calendar there are several highlights: March consumer confidence on Wednesday, industrial output and labor market data on Thursday, Moody’s rating decision on Friday.
1 week ago
Inflation from the world that no longer exists
This year's revision of the consumption basket weights did not significantly alter the picture of Poland's inflation – both January and February CPI remained at 2.1% yoy, while core inflation stays elevated, particularly in the services sector. The effects of higher fuel prices resulting from the Middle East conflict will become visible starting from the March reading. In the coming months, the Monetary Policy Council is expected to remain cautious and keep interest rates unchanged.
2 weeks ago
A Pleasant Postcard from the Past
We are waiting for final CPI data for the first two months of the year (on Friday). We expect CPI to have risen slightly in February (from 2.1 to 2.2% yoy), but annual basket reweighing might have changed a lot.