Retail sales jumped in February 23.8 percent year-on-year. After a 20.9 percent growth rate in January, analysts had expected it would grow by 19 percent.
“Expectations were big but they turned out to be small as compared with the data published by the central statistical office GUS. An increase by nearly one-fourth is the result of quickly growing wages and increasing employment rate but also high inflation”, Mateusz Szczurek, ING Bank Slaski chief economist said.
In February, the average wage rose 12.8 percent year-on-year while employment grew by 5.9 percent. Inflation rose 4.2 percent while the unemployment rate fell from 11.7 percent in January to 11.5 percent in February.
Adding one more element: industrial production growth in February which amounted to 14.9 percent year-on-year, it turns out that the economy is in much a better shape than expected two months ago.
“The forecasts that economic slowdown would come in the first quarter of 2008 did not come true. We don’t know March data yet but it seems that GDP will grow by 6 percent. This is very good dynamics, similar to the one generated in the previous quarter”, Marek Zuber from Dexus Partners commented.
Many economists have already increased their GDP growth forecasts. Bank Millennium – from 5.3 to 5.5 percent, Bank BPH from 4.8 to 5.7 percent.
However, high wages and growing consumption boost inflation. In result, interest rates keep growing. Yesterday, the Monetary Policy Council raised interest rates by 25 base points for the third consecutive time. The main interest rate amounts to 5.75 percent now.
“Yesterday’s increase was not the last one. In the worst scenario, interest rates will grow to 6.5 percent this year”, Marek Zuber believed.
The main interest rate in Poland has grown by 1.75 percent in the last 12 months.