Consumption slows down but economy is not doing the same

opublikowano: 25-01-2008, 09:55

Warsaw (Puls Biznesu) – The Poles spent less on shopping in December than analysts had expected. This may be an argument not to tighten fiscal policy but it does not mean that economy is slowing down.

Economists forecast that in December 2007, an average Pole spent 20 percent more than a year earlier. The difference was nearly twice smaller. According to the central statistical office GUS, retail sales rose 12.4 percent year-on-year (for the lowest level since August 2006) and 15.7 percent month-on-month. There were other negative macro data for December published. Industrial production growth fell from 8.5 percent in November to 6.2 percent against 8.8 percent expected by analysts. Wage increases amounted to 7.2 percent against 9 percent forecast by the market.

Economists calm down and say it’s too early to forecast slowdown of economy.

“Retail sales fell so deeply mainly because of food. In December 2007, we spent 0.3 percent less on food than a year earlier while the Poles spend the biggest part of their wage on this food products”, Marta Petka, Raiffeisen Bank economist explained.

Analysts believe that December data are an argument for those members of the monetary policy council who don’t want to tighten the policy.

“I still expect rate interest increases but the rate of implementing them will be more slowly”, Marta Petka added.

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