• On the following pages we present our new Macro Monitor on the Polish economy. It contains an updated outlook on the Polish economy taking into account the latest economic releases for May and June.
    • In general, economic activity should continue to decline in the coming quarters. GDP growth should move into negative territory in Q2 09 and most likely bottom out in Q3 and Q4 09. Although the Polish economy has not been as hard hit in terms of drop in economic activity, there are not clear signs of a swift recovery. We expect GDP growth of -0.3% y/y in 2009 and 0.2% y/y in 2010.
    • Private consumption should decline in the coming quarters on the back of a continuing deterioration in labour market conditions. This will play a key role in the recovery for the Polish economy. We are possibly looking at a year of contraction in private consumption and a slow recovery starting in H2 10. Investments, on the other hand, should bottom out in Q2 and Q3 09 and then gradually begin to move up.
    • The drop in economic growth and the expected slow recovery is likely to have a significant negative impact on the Polish labour market. Unemployment is expected to rise to 12.0% in 2009 and further to 14.4% in 2010. On the positive side, low capacity utilisation should reduce inflationary pressure for some time.