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OECD: Polish economy to grow by 1.6% in 2013, 2.5% in 2014


2012-11-28



Economic growth in Poland will decelerate considerably in coming quarters amid weaker domestic and external demand, but activity should pick up again in the second half of 2013 and strengthen further in 2014, the Organisation of Economic Cooperation in Europe (OECD) says in its latest Economic Outlook report, released on 27 November.

The OECD reckons the Polish economy will grow by 1.6% next year, compared with an estimated 2.5% in 2012, before accelerating to 2.5% in 2014. Nevertheless, the labour market is expected to remain weak, with the harmonised unemployment rate projected to rise to 10.5% in 2013 and 10.7% in 2014, from 10.1% in 2012.

According to the Organisation, the government needs to continue efforts to reduce the structural budget deficit, even as it allows the automatic fiscal stabilisers to play a role. It should also implement structural reforms to boost potential growth and strengthen the recovery. Under these circumstances, a “sizeable” easing of monetary policy would be welcome to cushion the impact of the fiscal retrenchment and cyclical downturn.

By way of comparison, the Czech Republic is forecast to experience an 0.9% contraction of economic output in 2012, and to register growth of 0.8% in 2013 and 2.4% in 2014. Slovakia is to see growth of 2.6%, 2% and 3.4% over this period, respectively. The Hungarian economy is projected to shrink by 1.6% this year and by 0.1% next, before recovering to growth of 1.2% in 2014.

The economy of the euro area is expected to show negative growth of 0.4% in 2012 and to pick up only slowly during 2013 and into 2014, with growth rates of -0.1% and 1.3%, respectively.

Overall, the OECD expects the global economy to make an only hesitant and uneven recovery over the next two years, and warns that decisive action by governments in the US, the eurozone and elsewhere is necessary to boost confidence and growth and avert a possible downturn.



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