Tuesday, May 31, 2016

We already know why the GDP in the first quarter slowed so. Failed investments – Wyborcza.biz

The fact that economic growth in the first quarter was much weaker than that recorded at the end of 2015, we know of many weeks. Not only that economic performance given every month (production in construction and industry, retail) deteriorated, it is still two weeks ago GUS preliminary reading of GDP. He informed then, based on incomplete data set, that growth slowed to 3 percent. Recall that in the fourth quarter of last year, we had 4.3 percent. GDP growth.

Today, GUS has confirmed this reading, also reported of which resulted decline. As you would expect, we had a decline in investment. This is a very important engine driving the economy. Not only because it gives the current acceleration, but also because the growth generated investments is more durable.

– the first quarter of 2016 years investment fell by 1.8 per cent., This happened despite the favorable situation in finance companies. This is the first decline in nine quarters – said the president of the Central Statistical Office Halina Dmochowska at a press conference. – The largest decreases investment we had in the energy, water and transport. So we have, hopefully temporary, lower expenditures on network infrastructure – she added.

Investment companies with foreign capital increased by 3.8 per cent., And their share in investments has grown from 36 to 42 percent.

This decline in investment is best seen after the changes called. value-added in the economy. In construction, this added value has fallen by as much as 12.6 percent. By contrast, in the financial sector increased by 18 per cent., And in the information and communication growth was 5 percent.

On the other hand, it is a great consumer demand. Private consumption grew by 3.2 per cent., And the so-called. collective consumption (in hospitals, schools and other such facilities) increased by 4.4 percent.

Exports in the first quarter grew (by 6.9 per cent.), but more slowly than imports (this increased by 9.3 percent.). Therefore, the contribution of foreign trade to economic growth is negative. This means that domestic demand is growing faster than foreign.

Economists are of the view that the slowdown in GDP growth in the first quarter is temporary. Investments should spin when the money will be available from the new EU budget perspective, and our expenses will drive additional money with 500+. – In April, in all areas, except for construction, improved performance of economic activity. Better moods business plus a good financial situation bode well for the future – confirms Dmochowska.

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