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JP Morgan: GDP growth in Poland to remain around 4% in 2011-2012


JP Morgan has upheld its forecast of economic growth in Poland this year and next. The US investment bank expects the Polish economy to expand by 4.2% in 2011, before easing slightly to grow by 4% in 2012.

The projected marginal weakening of GDP growth next year will be caused by cuts in spending on public investment, fiscal retrenchment, and weaker external demand. Consumer demand will remain the chief engine of growth, with an increase of 3.5% this year, but there will also be a resurgence in private sector investment, which is expected to rise by 9.5% in 2011. The contribution of net exports will be slightly negative, according to the bank.

Inflation will peak in August 2011 at 5.1-5.2% y-o-y, and will subsequently fall to 3.2% y-o-y in December, JP Morgan reckons. Annual inflation for 2011 will be 4.6%. The ongoing monetary tightening cycle will push the main interest rate to 5% by early 2012, and will leave it at 5.5% as of the end of next year, up from 4.5% at the moment, the bank predicts.

The general government deficit should fall to around 5.6% of GDP in 2011, in line with government estimates, and public debt is likely to stabilise at 53% of GDP according to the domestic methodology, or 55% of GDP in accordance with the EU methodology, before falling in 2012.

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