The Polish economy is likely to expand at a slower pace this year and in 2013, a report from the Organization for Economic Cooperation and Development (OECD) said Wednesday.
OECD expects growth to ease to 2.75 - 3 percent this year and in 2013, owing mainly to the government's planned fiscal retrenchment and the stalled European growth. Poland's economy is estimated to have expanded 4.3 percent in 2011.
The agency observed that Poland has been the best growth performer within the OECD through the global economic crisis. The country, which is not immune to contagion risks from its European trading partners, however, would have policy space to cushion the shock by easing monetary conditions if slowdown turns sharper than expected, the report said.
According to the agency, the Polish government will be able to meet its deficit target of 2.9 percent GDP in 2012 if the new expenditure regime for local governments is implemented as planned. OECD recommenced that Poland should take steps to achieve fiscal consolidation by reducing deficit to around 2 percent of GDP in 2013, and engage in additional tightening to bring it to the medium term objective of 1 percent of GDP.
The government's target is to reduce the government deficit from an estimated 5.6 percent of GDP in 2011 to 2.9 percent in 2012 and to 2.5 percent in 2013.
The report said that Poland's unemployment rate is likely to stay high at about 10 percent, while headline and core inflation are seen converging towards the middle of the inflation target band of 2.5+/-1 percent target.
by RTT Staff Writer
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