The economic recovery gains pace and breadth
Overview:
The Polish economy continues to deliver excellent results. It managed to record positive y-o-y growth even during the worst of the global economic recession although it did slow down. The recovery is now proceeding well. Q3 GDP figures showed economic growth both above expectations and with a wider base than previously. Domestic demand is starting to recover. The current account deficit is low and inflation near to target. The central bank will have to start hiking rates as the economy recovers and inflation risks start to rise. The speed at which it does so will depend on the path of the zloty which has recovered steadily from a sharp sell-off during the financial crisis. The key challenge for the authorities is to stabilise the public debt to GDP ratio through a combination of fiscal tightening and privatisation.