KBC Market Research Desk
KBC Bank
Significantly weaker than expected data on industrial production and retail sales (both for April) weighed on the Polish zloty yesterday. After their release, the zloty pared Tuesday’s gains and hit a four-day low against the euro.
Regarding industry, its output grew by 2.3 % Y/Y (instead of expected 5.5 % Y/Y). A particular disappointment was that also manufacturing had contributed to the industrial slowdown in April. As concerns retail sales, seasonal factors (Easter holidays) probably played a role in their year-on-year decline as labor market data have suggested rather positive prospects of households’ consumption and household spending’s contribution to GDP growth in 2015Q2.
In our view, disappointing industrial production and retail sales in April should not move us to strong negative conclusions regarding future economic growth or central bank policy in Poland.
Today in early trading, the zloty has extended yesterday’s losses and at the time of writing this note, it is being traded above EUR/PLN 4.08. Let us recall that the second round of presidential elections that will take place on Sunday should be a constraint for significant appreciation of the Polish currency by the end of this week.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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