New York based credit rating agency Moody’s just said that its estimates of GDP growth in Poland are now sharply higher than their previous estimate, at 4.3% up from 3.2%. Strong domestic demand and successful fiscal consolidation aided in the strong growth this year, according to Moody’s, which also said that the revised estimate was credit-positive for the sixth largest Eurozone economy and that Poland’s credit rating will be reviewed later in September.
The agency said in their report, “We expect GDP growth to be driven by solid private consumption, as well as the slow, but steady, recovery in investment that reflects a favorable external environment and higher inflow of European Union funds. Higher economic growth and strong budget execution significantly increase the chance that Poland’s 2017 fiscal deficit will be well below the 3 per cent Maastricht-threshold for a third consecutive year.”
Further commenting on Poland’s fiscal situation, Moody’s said, “These positive results prompted us to revise our 2017 GDP growth forecast to 4.3 per cent from 3.2 per cent, pushing the output gap into positive territory for the first time since 2012. Additionally, we expect Poland’s fiscal position to strengthen, with a fiscal deficit of less than 2.5 per cent of GDP in 2017, versus our earlier forecast of 2.9 per cent of GDP.”
Actual growth in the first quarter of this year was 4.0% versus the previous year and second quarter growth came in at 3.9%, meaning Moody’s is expecting a slight acceleration in the second part of the year. After the strong second quarter growth numbers were released in August, the Polish Finance Minister also said that he now though growth would exceed his previous forecast, which was for 3.6%.
After August’s results, he stated, ““Poland is a leader in economic growth among ten of the largest European Union countries and, as shown by [Wednesday’s] data published by Eurostat, Poland’s economic growth is twice as fast as the average of all European Union countries.”