Download Economic bulletin 23 (776)

Economic bulletin 23 (776)
News highlights

Gross Domestic Product (GDP) rose in Q1 2007 by 7.4 pct after a 6.6-pct growth in
Q4 2006 and a 5.5-pct rise in Q1 2006, the Central Statistical Office GUS reported.
The result exceeded all expectations of economists.

The Monetary Policy Council (RPP) left all interests rates unchanged. The central
bank (NBP) reference rate remains to be 4.25 percent. The RPP decision means that
the 7-day intervention rate will continue to be at no less than 4.25 percent, the
lombard rate will be at 5.75 percent, the rediscount rate will be at 4.50 percent and the
deposit rate will be at 2.75 percent.

At the end of April foreign investors held 78 billion 975.66 million zlotys (27.8
billion USD) in Polish securities against 78 billion 34.79 million zlotys at the end of
March, the Finance Ministry said. The value of foreign investments grew to 78 billion
934.94 million zloty against 78 billion 14.77 million zlotys in March.

The banking sector increased its Q1 net profit by 22.3 percent y/y to 3.64 bn zlotys,
the Central Statistical Office GUS said. The operating revenues amounted to 30 bn
zlotys, down by 0.2 percent y/y. Gross financial result stood at 4.45 bn zlotys and was
25.7 percent higher y/y. Operating costs fell by 4.1 percent to 25.6 bn zlotys.
Review
14 bn USD in greenfield investments in 2006
Poland attracted 14 billion USD in greenfield investments in 2006, president of the Polish
Information and Foreign Investment Agency (PAIiIZ) Pawel Wojciechowski said.
Greenfield investments are direct investments in new facilities or the expansion of
existing facilities.
Poland is a leader in Central and Eastern Europe in attracting foreign investors - it gets 45
percent of all direct investments flowing to new EU members, Wojciechowski said.
The reasons for investor interest in Poland are big internal market, high economic growth,
relatively cheap workforce and highly qualified personnel, he explained.
Cabinet approves report on 2006 budget implementation
A successful course of the macroeconomic situation was responsible for the fact that
budget revenues were higher by 1.2 pc and expenditure lower by 1.4 pc than those
written into the 2006 budget law, says a statement from CIR government information
centre published in connection with the cabinet's approval of the finance minister's report
on the 2006 budget execution.
CIR said the budget had been implemented in accordance with the budget law.
Minister predicts high investments in industry
The Polish economy runs at full speed and uses the existing production capacity in 84 pc,
a rate without precedent, according to minister of economy Piotr G. Wozniak."The
capacity utilization figure suggests that we face a period of rapid investing in industry,"
the minister predicted. The Central Statistical Office (GUS) said that the Polish GDP rose
7.4 pc y/y in the 1st quarter, while capital investment rose 29.6 pc. Wozniak sees GDP
growth abating to 6 pc or slightly more in the 2nd quarter.
Number of foreign tourists to reach 16.3 million in 2007
Some 16.3 million foreign tourist are expected to visit Poland this year. Around 15.7
million tourists visited Poland in 2006.
“The number of foreign tourists visiting Poland is growing 4 percent annually since 2003,
this is slightly above the average European level," Director of the Tourism Institute
Krzysztof Lopacinski said.
The biggest number of visitors is expected to come from Germany (5.6 million). Some
2.7 million tourists are expected from the "old" EU countries. The number of tourists
from Russia, Ukraine and Belarus is to rise by 100 thousand to 4.8 million people.
Foreign tourists are expected to spend 7.9 billion USD, 4 billion from tourists spending in
Poland more than one day and 3.9 billion visiting Poland just for one day. Last year the
total sum reached 7.2 billion USD.
News in brief
AGRICULTURE
The International Federation of Agricultural Producers (IFAP) will host its June 2008
World Congress in Warsaw.
INVESTMENTS
Italian maker of white appliances Indesit is to invest 80 million euros in plant producing
washing machines and dishwashers in Radomsko, central Poland. The plant, to be built in
the Lodz special economic zone, will start production in 2008. Employment is to reach
1,500 people.
METAL INDUSTRY
ThyssenKrupp Steel AG, a company in the group of Germany’s biggest steel producer,
has opened a service centre in Dabrowa Gornicza (Slaskie province) at the cost of around
20 million euros. The centre can prepare up to 125,000 tonnes of steel products annually
to meet the needs of customers.
INVESTMENTS
LG Technology Park grouping 9 factories of the LG.Electronics concern was opened in
Biskupice Podgorne near Wroclaw. The Korean side is to invest over 800 million euros
by 2011 in the factory producing LCD modules and household appliances. The
employment is to reach 12,000. LG Electronics, LG Philips LCD, LG Chem, LG Innotek
companies have their factories in the vicinity of Wroclaw.
ECONOMY
Forty-five percent of Polish households had a PC at home in 2006 and 36 percent used
the Internet, according to data published by GUS. Gus said that in 2006 74 pct of
households had mobile phones for personal use and 72 percent fixed line phones. 34
percent use cable TV and 7 pct digital TV.
ECONOMY
Slovakia is to withdraw its veto on Poland’s registering with EU its oscypek cheese after
receiving guarantees that the name of the cheese will be used only in Polish
Weekly roundup
WB: Polish economic growth similar to its 2006 level
In 2007 Polish economy will grow at a similar pace to 2006 (6.1 pct), the World Bank
announced in a report on the new EU members.
The authors of the report were analyzing economic situation in EU new states (EU8+2),
or states that joined EU in 2004 (without Malta and Cyprus) and Romania and Bulgaria.
According to WB economic growth will slacken in most new EU countries. “The
economic growth in Poland, Romania and Slovakia will be similar to that of last year,”
Thomas Blatt Laursen of the WB said.
Quoting EC figures, the report predicted Poland's 2007 growth will be similar to 6.1 pct
recorded in 2006, and the 2008 growth rate will be at 5.5 percent. According to IMF data,
it will be 5.8 pct and 5 pct, respectively.
WB also warned about rising inflation in the region and forecast Poland's 2007 and 2008
inflation rate at 2.2 and 2.9 percent. According to IMF data, it will be 2.2 pct and 2.9 pct,
respectively.
According to the bank fulfillment of current wage demands in the new EU states,
including Poland, without necessary reforms could cause "grave fiscal problems." The
reforms should concern public finances, labour market and public administration.
According to WB, Polish farmers’ incomes grew by 50 pct after Poland joined EU.
1 USD = 2.83 PLN
1 EUR = 3.81 PLN