Download Economic bulletin 24 (778)

Economic bulletin 24 (778)
News highlights

In may the unemployment rate stood at 13 percent, down 0.7 percentage points from
April, the ministry of labour and social Policy has reported. According to the ministry
the number of jobless in May 2007 was at 1,986.4 thousand people, down 5.5 percent
or 116.6 thousand people from the end of April. Since the start of 2007 the number of
jobless fell by 14.4 percent or by 322.9 thousand people.

The average minimum income per person in families in 2006 was at some 835 zlotys,
the Central Statistical Office (GUS) has said. The income was 8.5 percent higher in
real terms than in 2005.The highest income was reported by farmers and the lowest
by the retired.

Gross revenues on privatisation at the end of may 2007 totalled 998.571 million
zlotys or 33.19 percent of the plan for the entire year, the state treasury ministry
reported. This year the ministry plans to earn on privatization 3 billion zlotys gross or
2.3 billion zloty net
Review
Government passes Kluska Packet
The government Tuesday passed the so-called Kluska packet of liberal business laws.
The new legislation will come in force next autumn.
Authored by Polish businessman Roman Kluska, the legislative package foresees changes
in construction laws, easier business registration procedures and less bureaucracy.
PM Jarosław Kaczyński told journalists that the adopted packet would make Poland a
„country more friendly to a citizen who wants to earn money on his/her own business.”
Jarosław Kaczyński announced a special team for „restoring the freedom of economy in
Poland” would be set up.
According to Adam Ambrozik from the Confederation of Polish Employers (KPP) the
Kluska packet did not answer enterpriser needs and will change little on the domestic
business market.
It's good to hear about more liberal laws, but these will be mainly cosmetic changes,
Ambrozik said.
Jeremi Mordasiewicz from the Lewiatan private employer confederation called the packet
"a small first step".
These changes don't really deserve to be called a "packet". They're just too superficial,
Mordasiewicz argued.
NBP president: GDP to grow by some 6.5 pct in 2007
This year Poland's economy will grow by around 6.5 percent, and in the coming years by
over 5 percent, National Bank of Poland (NBP) governor Slawomir Skrzypek said
Tuesday.
According to Skrzypek, such high growth can be attributed to growing investments in
enterprises, flow of foreign investments and growing volume of EU funds coming to
Poland.
The NBP governor said that the central bank's target inflation remained unchanged at 2.5
percent plus/minus one. In the coming 12 months we should stay within the fluctuation
range allowed in our direct inflation target policy. But there are threats arising from
growing wage pressure and they will be taken very seriously into consideration while
taking decisions, he stressed.
He also said that Poland could join the euro zone in 2012 at the earliest.
The decision on joining the euro zone has been made. So we are not asking if but when,
Skrzypek said and added that a special team at NBP would work on the date and
conditions of adopting the euro.
According to the NBP president, 2009 will be the first year when Poland meets
convergence criteria, especially those concerning budget debt. And then Poland has to
remain in ERM2 mechanism for two years, he explained.
Poland, Albania sign economic cooperation accord
Poland and Albania have signed an agreement on economic cooperation. The document
was signed by Economy Minister Piotr Wozniak and visiting Minister of Economy,
Trade and Energy Genc Ruli in Warsaw on Monday.
The agreement will allow further development of cooperation in industry, power and
mining sectors and in tourism.
Both minister stressed that hitherto bilateral turnover is very modest. Last year, Poland
exported to Albania goods worth 5.6 million euros, chiefly agri and food products as well
as electro- engineering and chemicals products. Imports closed at 800 thousand euros and
focused on wood and paper products and products of the light and chemical industries.
Minister Ruli saying that Albania is one of the best tourist regions in the world although
it still has visible shortcomings in its road and telecommunnications infrastructure,
stressed that Albania is offering its land for investments while its parliament is working
on a draft law to allow the sale of agri land to foreign investors.
The minister invited Polish capital to invest in Albania's fuel sector and to cooperate in
the power industry.
Under the signed accord sides will set up a mix commission with the task to prepare
proposals aimed to further develop bilateral cooperation.
Polish, Ukrainian organisational coalition of employers for Euro 2012
The coalition of Polish and Ukrainian Employers for Euro 2012 has been set up in
respective countries to support use the championship to the development of both
countries’ economies/. The coalition plans to support projects from the field of
infrastructure and transport, sport infrastructure, the development of accommodation and
catering as well as the two countries world-wide promotion. The coalition plans to start
promotional campaign in European media.
News in brief
FUELS
A plan for enlarging Sarmatia company that will deal with the construction of OdessaBrody-Płock-Gdańsk pipeline transporting Caspian Sea crude oil to Europe will be
drafted by the end of June, Economy Minister Piotr Naimski has said.
FINANCE
As of January 1, 2008 the finance ministry plans to introduce cash registers in surgeries,
deputy Pm and Finance Minister Zyta Gilowska has announced. She added that the cash
registers in surgeries will not collect VAT for this would be incompatible with the EU
law. In her opinion the point is to register services financed from public and private funds.
As of next year the ministry plans to introduce tax deduction from PIT on services
rendered by private health care institutions. FINANCE
Three coins commemorating the 750the anniversary of the location of Cracow has been
launched by the National Bank of Poland (NBP). The golden coin is worth 200 zlotys, the
silver one s worth 10 zlotys and the Nordic Gold alloy coin is worth two zlotys.
TRADE
Poland's Bryndza highland cheese was officially registered as an EU regional product on
Monday. The brand will be protected throughout the EU, the EC reported on Monday.
The EC decision will be published in the EU Journal of Laws in a few days and will
come into life 20 days later. Bryndza cheese is the first EU-protected Polish product.
FINANCE
By the end of the year cash will be available in 3,000 Polish post offices via terminals
installed at the cash desks at post desks, PKO BP bank and Polish Post (Poczta Polska)
have reported. The service will be available for holders of Visas and MasterCards.
Weekly roundup
ML upgrades interest rates’ forecast for end of 2008
Merrill Lynch (ML) analysts upgraded their forecast of basic interest rates in Poland to 6
percent at the end of 2008. By the end of 2008 they expect two interest rates hikes by 25
base points each. At present the most important interest rate is at 4.25 percent after a hike
introduced by the Monetary Policy Council (RPP) in April.
Merrill Lynch analysts note in a commentary a growing dynamics of household incomes
with the minimum income for the first three months of 2007, the growth of unitary labour
costs.
Data on GDP growth for the 1st quarter of 2007 indicates that GDP rose by 7.4 percent
y/y boosted by internal demand that grew by 8.6 percent y/y. In the same quarter
employment rose by 5.3 percent y/y against 3.6 pct y/y in the 4th quarter of 2006.
Guided by the above mentioned data Merrill Lynch calculates growth of labour
profitability at 2 percent in the 1st quarter of 2007 against a 2.9 percent growth in the 4 th
quarter of 2006.
"Thriving economy will prevail until at least the end of 2008 (as a reaction to structural
factors related to the EU) and will exert further pressure on unitary labour costs as higher
profitability (despite investments) will fail to keep the pace with the dynamics of pays,”
they wrote. The dynamics of pays may accelerate by more than 10 percent annually due
to factors on the labour market and migration in search of work.
1 USD = 2.87 PLN
1 EUR = 3.84 PLN