Download Economic bulletin 22 (775)

Economic bulletin 22 (775)
News highlights

At the end of this April the unemployment rate fell to 13.7 percent from 14.4 percent
in March, the Central Statistical Office (GUS) has reported. The number of
unemployed register with Job placement centres at the end of April stood at 2 million
103.1 thousand people, down by 129.4 thousand or 5.8 percent. In relation the
number of jobless recorded in the same period or last year the number was 600.5
thousand or 22.2 percent lower.

Retail sales in April rose by 15.1 percent from the comparative period of 2006 after a
19.2 percent year-on-year rise on March 2007. Month-on-month it rose in April by
1.2 percent the GUS has reported.

The number of flats completed this April rose by 10.5 percent compared to the same
period of last year and totalled 8 thousand 089, the GUS has reported.

GUS downgraded GDP growth prediction for the 4th quarter of 2006 to 6.6 percent
from 6.7 percent estimated earlier. At the start of May GUS upgraded GDP growth
for the 4th quarter of 2006 to 6.7 pct from 6.4 envisaged earlier.

In April the industrial production rose by 12.4 pct year-on-year after an 11.3 percent
year-on-year growth in March but compared to the previous month it fell by 8.7 pct,
GUS has said.

The current account deficit in March was at 539 million euro against 561 million euro
deficit in February; analysts expected the March deficit at 453 million euro, The
National Bank of Poland (NBP) has reported. Compared to data for March 2006 the
current account deficit grew by 183 million euro.
Review
Poland, China sign three cooperation agreements
Three agreements on Polish-Chinese cooperation were signed here Friday in the presence
of President Lech Kaczynski and Chairman of the Standing Committee of China's
National People's Congress Wu Bangguo.
The first document is a protocol on cooperation in culture between 2007 and 2011 signed
by deputy Culture Minister Jaroslaw Sellin and Ambassador of the People's Republic of
China Yuan Guisen.
Another document relates to sanitary terms of Polish poultry export to China signed by
Secretary of State at the Agriculture Ministry Henryk Kowalczyk and Chinese deputy
Minister of Main Administration for Quality, Control and Quarantine Supervision Li
Chuanqin.
Also an agreement between Polish and Chinese health ministries on cooperation in health
care and medical sciences was signed by undersecretary of state at the health ministry
Waclaw Wojtal and the Chinese Ambassador to Poland.
KGHM signs contract for copper deliveries to China
KGHM Polish Copper SA signed a contract for copper deliveries to China in 2007. The
contract is part of a long-term agreement signed in 2004 for copper deliveries between
2007 and 2010. Agreements on economic cooperation with China have also been signed
by Polkomtel, PZL (Polish Aviation Plant) Świdnik and Gromada company.
Polish Foreign Minister Piotr Woźniak stressed that Chin is Poland’s biggest partner in
Asia. He recalled that Polish trade deficit with that country stands at nearly 7 billion USD.
Polish-Chinese trade turnover in 2006 exceeded 8 billion USD. "This year we expect it to
exceed 10 billion USD, Woźniak announced.
He also said that in coming two months signed will be also another contracts with
Chinese firms.
Poland's economy grew 7 pct in 1st quarter
Poland's GDP grew by 7 percent in the 1st quarter, and will grow around 6 percent in full
year 2007, the economy ministry said in a report.
In the entire period total consumption had the most significant effect on the economic
growth, the report said. In addition investment outlays gained significance.
According to the ministry's estimates, total consumption rose by 5 percent in the 1st
quarter of 2006. In 2007 investments outlays are expected to increase by 21 percent and
inflation is to reach 2.1 percent.
The report attributed the growth to Poland’s integration with the European Union which
boosted exports. Wrote the authors of the analysis.
According to the ministry, between January and March 2007 the gross value added in
economy grew by 7.1 pct chiefly due to a stable growth of the value added in the sector
of market services (some 5 pct), the share of which in the entire value added accounts for
50 pct. The ministry predicts that inflation in 2007 will be at 2.1 pct.
News in brief
FINANCE
Poles savings exceeded 625 billion zlotys at the end of March 2007, up by 25.4 percent
year-on-year, Analizy Online said Friday. During the 1st quarter of 2007 Poles' savings
rose 7.1 percent or 40 billion zlotys from the end of 2006. At the end of the 1st quarter of
2007 savings structure was as follows: bank deposits - 39 percent of all savings, open
pension funds - 20.3 percent, investment funds - 14.1 percent, shares and bonds - 8.5
percent of total savings, insurance capital funds - 4.8 percent).
MOTORISATION
The Fiat Auto Poland plant in Tychy, south Poland, will employ over a thousand workers
in connection with the production startup of the new Fiat 500 and Ford Ka. Recruitment
to the new production lines is underway already, Fiat Auto Poland executives informed
Friday.
The Tychy plant, manufacturer of the popular Fiat Panda, currently employs a crew of
3.7 thousand.
INVESTMENTS
Taiwanese TPV concern plans to start the construction of a new plant to produce LCD
monitors and tv sets. Production is start in mid-2008. The 41 million euro investment will
generate some 1.2 thousand new job places at the plant and a similar number in
companies cooperating with the concern.
WARSAW STOCK EXCHANGE
Warsaw Stock Exchange (WSE) President Ludwik Sobolewski expects that ten or so
companies will be listed on the New Connect market in 2007.
First companies are to debut during the next three months, most likely in August.
INVESTMENTS
The Hindu IT company Zensar Technologies plans to invest 2-3 million USD in Poland
in the next few years. A Zensar software development centre opened in Gdansk
Wednesday.
Zensar officials said that their Polish operations would provide 350 jobs. Recruitment to
the Gdansk centre is already underway.
TOURISM
20,6 million foreign tourists will visit Poland in 2012, according to estimates of the
Institute of Tourism. The organization of Euro 2012 in Poland will boost the country
promotion, the institute said. Its data show that last year Poland attracted 15.7 million
tourists.
Weekly roundup
Banks: 250 billion zlotys in mortgage loans by 2011
By 2011 Polish banks expect to grant 250 billion zlotys' worth (89.6 billion USD) of
mortgage loans, the Institute for Market Economy Studies (IBnGR) reported Tuesday.
IBnGR vicepresident Leszek Pawlowicz noted that today Poland's mortgage loan market
constituted only 0.3 percent of the EU market although Poles accounted for 8,3 percent of
the EU population.
He added that a rise in mortgage loans in Poland was to be expected at least over the next
11 years and that at present the relation between the value of mortgage credits granted in
Poland to consumption credits stands at 1.1 to 1 percent while the average for other EU
countries is 3.5 do 1.
In the institute’s opinion this disproportion indicates further development in mortgage
credit market, the value of which stands now at some 80 billion zloty. Pawłowicz added
that the Polish market may follow the example of the Spanish market which collapsed
only last March after scores of thriving years. In 2011 mortgage credits may account for
16-18 percent of GDP.
The average interest rate on mortgage credit in Poland has been set at 5.6 pct (for credits
taken in zlotys), which places Poland in the group of countries with the most expensive
credits. However, the difference is not so huge as the average interest rate on mortgage
credit in Hungary is at 5.57 pct,, in Great Britain – 5.2 percent and in Italy – 5.05 pct.
However, in Pawłowicz’s opinion, even though the banking market is getting liberalised
we should not hope for the same opportunities of getting credit as in other EU countries
owing to different evaluation of security procedures in Poland and, for instance, British
banks.
1 USD = 2.83 PLN
1 EUR = 3.81 PLN