Thanks to the program “500+ Family” GDP growth since the second quarter of this year to mid-2017 years will be maintained at a higher level – it is written in the published Tuesday NBP projection.
It is expected that GDP growth in 2016. And 2017. Will amount to 3.8 per cent., And in 2018 – 3.4 percent.
– GDP growth in Poland since the second quarter. 2016. until mid-2017. will be maintained at a higher level, what will contribute to accelerating the growth of household consumption related to the introduction of the program Family 500+. In further over the projection horizon, after the expiry of the impact of this factor on the path of private consumption, economic growth will fall to 3.4 percent. y / y, below the long-term average – says the document.
What drives our economy?
According to the NBP main driver of GDP growth over the projection horizon will remain, alongside consumption , gross fixed capital formation, the negative contribution of net exports to growth.
– National economic growth, increased transfers outside the family, will be supported by growth in disposable income due to an increase in wages, low prices of energy resources and historically low interest rates. Domestic demand limit may, however, reducing the positive impact of the above factors, the increase in the cost of servicing loans by the introduction of a tax on certain financial institutions – written.
High volatility in the world
According to the authors projected impact of current and future global economic conditions on the condition of Polish economy is ambiguous.
– On the one hand, is expected to continue a moderate recovery in the euro zone, on the other – are growing concerns about the sustainability of growth in emerging economies – written.
500+ wind up the economy
the projections show that the current negative output gap, over 2,016 years closes up, which is supported by, among others, fiscal impulse associated with the increase in family allowances under the Family 500+.
– In subsequent years, the gap will be shaped, however, only slightly positive. At home and abroad remain too will be limited cost pressures, reflected in the low growth rate of unit labor costs and import prices and prolonged drop in domestic producer prices (PPI) – written.
The projection horizon is expected that export growth will remain relatively stable, averaging 6.2 percent. y / y.
– This is due to maintain a relatively constant projected growth of European economies, and thus demand flowing from them. The negative impact on the export forecast will instead downturn in emerging economies (continued slowdown in China, recession in Russia and Brazil). This effect, however – due to the relatively small share of these countries in Polish trade turnover (both direct and indirect through the Polish participation in global supply networks) – will not be significant – currently.
NBP says that despite the negative contribution of net exports to growth, trade balance will remain in the years 2016-2018 on a positive level.
Economist: 500+ help Polish economy
Jacek Kotłowski of the Economic Institute of the NBP stresses that additional money for households will increase GDP growth by 0.3 percentage points this year and 0.5 point next year.
The expert adds that the program, by increasing consumption, can have a positive impact on the labor market. Notes, however, that additional benefits may discourage some people to seek employment.
Low inflation
Inflation by the end of 2018. Will remain at a level significantly lower than the target NBP inflation target set at 2.5 percent. – According to a published Tuesday by the NBP projection of inflation and GDP.
– The protracted period of deflation in the Polish economy, mainly influenced – to gradually closing output gap – supply factors: strong reduction in prices crude oil and high supply of agricultural products. Expression of these conditions is the continued low cost pressure in the economy, reflected in the decline in import prices and domestic producer prices (PPI) and a moderate increase in unit labor costs – currently in the NBP projection.
– In the projection horizon, these phenomena will be gradually subside. The determinants of cost inflation, however, shows that the dynamics of consumer prices by the end of 2018. Will remain at a level significantly lower than the inflation target. In particular, at the end in the short term projection period falls in the prices of agricultural and energy markets, their growth in the coming years will be low, and the continuing moderate growth in the global economy as well as close to zero domestic demand gap will limit the scale of the increase in import prices and unit labor costs – added.
authors projections indicate that in recent years the Polish economy and cost pressures demand remained at a very low level.
The output gap
– this condition was reflected in the significant negative output gap, low growth in unit labor costs and falling import prices. In the projection horizon, these phenomena will gradually give way and, consequently, a moderate rise in core inflation – currently.
– On the one hand, slightly positive, stable over the projection horizon output gap indicates a gradual increase in the demand pressure in comparison with the years 2012-2015, and thus a period when the gap stood at clearly negative level. On the other hand, the factor limiting the growth of prices in the economy is sustained low cost pressure in the economy – added.
After a decline in import prices in 2013-2014, and probably also in 2015. in the projection horizon is expected to only a moderate increase in those prices.
Low inflation in Europe
– supported by the projected low inflation in the euro area and founded in the projection of the trend appreciation of the zloty. Low cost pressure is also reflected in the persisting for more than three years of negative dynamics of the index of producer prices and the slow-growing unit labor costs – currently.
– In 2017. in the direction of limiting the increase in core inflation would be conducive to further return to lower VAT rates – added.
Crude Oil still cheap
the document indicated that the historically steep decline in 2015., energy price inflation in 2016. will shape most likely even lower.
– supported by the expected further decline in the price of fuels for personal transport and the entry into force of the new, lower tariffs for the sale and distribution of electricity and natural gas. In subsequent years, energy price inflation will gradually grow longer, which is associated with a gradual easing the impact of a positive supply shock in the oil market – are currently in the projection.
– Increase in energy prices will remain moderate – restricts it for persisting over the projection horizon low energy commodity prices on world markets. The increase in energy prices in 2017. Will be further hampered by the announced reduction in VAT rates – added.
Food prices are low
The document further added that after a sharp decline in food prices in the years 2014-2015, the projection horizon expected to be moderate growth.
– On the one hand, it will gradually expire impact on the dynamics of food prices y / y seen in recent seasons economic high supply of agricultural raw materials. The rise in food prices will contribute to the gradually increasing demand from households – currently.
– On the other hand, the growth of food prices will limit emerging low agricultural commodity prices on world markets. Just as for the other components of the CPI, although to a lesser extent, the scale of the increase in food prices in 2017. Will be further limited by the reduction of VAT rates – we read.
Our currency is weak
Authors projection also stressed that in the fourth quarter of last year, the average rate of the zloty against the currencies of major trading partners Polish was weaker than in the previous quarter.
– depreciation of the zloty was related by global factors, including the monetary policy of the ECB and the Fed, and a further increase in risk aversion in emerging markets. After the recent weakening, the zloty exchange rate was significantly below the level specified by the fundamentals. Evidence of this, in particular the formation of a current account balance and capital in 2015. At historically high levels – says the document.
– The projection horizon is expected that with the normalization of the situation on the international currency markets, there shall be a gradual appreciation of the zloty, approximating the effective exchange rate to the equilibrium exchange rate. In the same direction will also affect the continuation of the process of real convergence of the Polish economy, reflected in the higher growth potential of the national product in comparison with the dynamic potential of the main Polish trade partners – were added.
projection of inflation and GDP prepared by the Institute of Economics (IE), the Polish National Bank; It shows the projected developments in the Polish economy, the assumption of constant NBP interest rates.
the March projection of NECMOD covers the period from the first quarter. 2016. for the fourth quarter. 2018. – the starting point of projection is the fourth quarter. 2015.
projection has been prepared under the assumption of unchanged interest rates NBP taking into account the data available until 23 February 2016.
Expert: Polish economy is doing well
Jacek Kotłowski the NBP’s Economic Institute told IAR that in the coming years Poland’s economic growth will remain at a high level. The main growth driver is consumption-driven good situation on the labor market, and in subsequent months also 500 Plus program. Polish economy also support growth of investments and exports.
Expert notes that GDP growth may harm mainly the situation beyond the borders of our country. Current concerns remain about the state of the economy in China and other emerging economies, or the euro zone.
Economists central bank also announced that this year the overall price level to decline by 0.4 percent. Next year, annual inflation at 1.3 percent, and 2018 prices will rise by 1.7 percent. At the same time the NBP experts emphasize that the ongoing deflation, or falling prices year on year, does not harm the economy. This is because Poles did not give up purchases in anticipation of lower prices.
PAP / IAR abo
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