A blog by an American expatriate living in the heart of New Europe

"It's a lateral transfer" -- George W. Bush, 43rd President of the United States
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Tuesday, August 30, 2005

Why aren't Poles buying anything?


Investment growth continues to disappoint in Q2 as demand weakens

According to the Central Statistical Office (GUS), the economy grew by 2.8% in Q2, which marks a slight acceleration in relation to the 2.1% observed in Q1. However, at the same time investment outlays increased by only 2.6% against 1% recorded in the first quarter and were much lower than the 4.4% anticipated by economists. "This data is disappointing. The result is worse than expected and worse than predicted by other macroeconomic data," said Katarzyna Zajdel-Kurowska, chief economist with BH. "Q2 was not a favorable time for investments. Enterprises directing products at the domestic market were affected by dropping consumption demand. Exporters in turn were not investing, as they were expecting the strengthening of the złoty and as a result a drop in their margins," said Wojciech Kuryłek, chief economist with KB. This means that the Monetary Policy Council (RPP) now has more reasons for further cuts in interest rates.

They're waiting for the elections. It's no use doing business with a government or according to rules that are going to change in a few months. In January, economists were predicting 5% growth for the year. Now we'll be happy with 3%.


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