• On the following pages we present an updated outlook on the Polish economy taking into account the latest economic releases for September and October.
    • Polish economic growth increased in Q2 09, which was a big positive surprise. However, we do not see any clear signs of a beginning of a recovery in either private consumption or investment, and we should be well into 2010 before the Polish economy begins to move up. We now expect GDP growth of 0.8% y/y in 2009 and 1.2% y/y in 2010.
    • Inflation could begin to tick down after being quite sticky for several months. We expect Polish inflation to come down to around 3% y/y by the end of the year and average 1.9% y/y in 2010.
    • Labour market conditions are still frail. We expect unemployment to continue to rise gradually, while economic growth remains weak. Polish unemployment could reach 11.6% by the end of 2009 and rise further to 13.4% in 2010. Furthermore, wage growth has slowed significantly and we expect a further slowing in the coming months. We forecast wage growth of 4.5% y/y in 2009 and 3.9% y/y in 2010.