The data on growth for the second quarter of 2016. Showed that the economy is growing more slowly than recently expected. Additionally, surprising economists worried about the high drop in investment. According to analysts, there is little chance that the full-year result will approach assumed by the government in GDP growth at 3.6%.
According to them, the main driver of the economy may remain domestic demand.
According to preliminary data of the Central Statistical Office (GUS), GDP (seasonally unadjusted) accelerated to 3.1% y / y in the second quarter. 2016. (compared to 3% y / y in the previous quarter), while domestic demand recorded an increase of 2.4% (against 4.1% in the first quarter. 2016.). In mid-August, the Central Statistical Office said in a quick estimate that GDP grew by 3.1% y / y in the second quarter. This year.
Most analysts believe that economic growth in the whole 2016 years will be below the level of 3.5% and part – that reaches the ceiling. Some point out that the GDP figures for the second quarter. Can be analyzed in detail by the MPC, while the Council may express concern mainly deep (and second in a row) decrease in investments in the economy
Below are the most interesting comments of analysts:
“in the second half of the year economic growth Polish will continue to build on domestic demand, in particular household consumption” – chief economist at Postbank Monika Kurtek.
“in our view, the structure of GDP growth in the second quarter. should prompt the government to concrete action significantly reducing the public finance deficit next year. otherwise, the uncertainty of investment firms can only deepen, “- chief economist Plus Bank Wiktor Wojciechowski.
” stronger acceleration of public investment we expect only in 2017. when will launch large-scale investment programs co-financed from EU funds in the new EU financial perspective. If this assumption materialize, also in 2017. It will be possible to maintain a stronger GDP growth around the level of 3.5 y / y, although the impact impulse consumer will no longer be additionally raise GDP growth “- analysts BOS Bank.
“We expect that in the third quarter, GDP growth will accelerate to 3.5 percent. yoy. You can not see yet the need to act for the MPC, in particular lower interest to improve the investment – difficult to expect a reaction of public investment at lower rates “- chief economist at Bank Gospodarstwa Krajowego Tomasz Kaczor.
Below are the most interesting speeches of economists in extenso
“released today by the Central Statistical Office data confirmed only minimal growth acceleration in the second quarter. Smaller than expected turned out to be the acceleration of household consumption, where the dynamics increased only 3.3% y / y from 3.2% y / y in the first quarter. 500+ Family Program and the improving situation on the labor market – as shown by the CSO – in the second quarter did not translate into more significant effect on the growth rate of household spending. Probably the effect will be more pronounced in the coming quarters. At the other extreme are still investing. The decline in the second quarter deepened dramatically (to almost 5% y / y), while it was expected narrowing of decline in the first quarter (at -1.8% y / y). Thus, the contribution of this category to GDP growth was the second consecutive quarter negative. The situation was saved ,, “the contribution of net exports to GDP growth, which in the period April – June was positive compared with a negative value in the first quarter. If the contribution of net exports, eg. Zero, GDP growth would be at 2.3% y / y. In the second half of Polish economic growth will continue to build on domestic demand, in particular household consumption. While in the second quarter of families with children received a total of nearly 5 billion, in the second half of this year. this amount will be approximately 11-12 billion zł. Very worrying is the situation in terms of investment. their deep decline in the second quarter and data on construction in the first month of the third quarter did not promise in the near future the situation will significantly improve. in the third quarter, probably still will be noted the decline in the fourth quarter output on the plus side is also highly questionable. throughout the year, the investments likely will be in the red. GDP growth in 2016. Will be according to my forecasts, up 3.3%, which is lower than recorded in 2015. Today’s figures will certainly be analyzed in detail by the MPC and I expect that the Council expressed its concern mainly deep (and second consecutive) decline in investment in the economy. At the same time I do not expect that these data led the Council to cut interest rates. There is excluded while easing by the MPC rhetoric “- chief economist at Postbank Monika Kurtek.
” The biggest surprise is clear deepening the pace of decline in gross fixed capital formation, which in the second quarter. Shrunk by as much as 4.9 % y / y compared to decline by 1.8% y / y in the first quarter. this year. For comparison, in 2015. Total investment increased in real terms by 5.8%. While in the first quarter. This year. decline in investment could be – at least partly – explain the high statistical base from the first quarter. 2015., when investments rose by 11.8% y / y, the data for the second quarter. clearly showed that their decline has a deeper character. Surely the greatest impact on the breakdown of total investment is no new public infrastructure investments co-financed from EU funds. Unfortunately, it not without significance is the decline in business investment despite their good financial situation. In the first half. year. investment the largest non-financial corporations decreased in constant prices by 7.1% against the growth of 10.9% in the first half. 2015. As a consolation in the second quarter. This year. the pace of decline was slower than in the first quarter. this year. In addition, in January-July this year. the sold goods of investment increased by 4.8% y / y against their growth by 9.4% y / y in the same period of 2015. In July of this year. (The beginning of the third quarter. This year.) Drop in sales of investment goods (-9.1% y / y) he was one of the largest of the so-called. industrial groupings distinguished by the CSO. Despite the excellent situation on the labor market and start disbursement of family allowances 500 plus real growth rate of private consumption in the second quarter. This year. It amounted to 3.3% y / y vs. 3.2% y / y in the first quarter. In the second quarter. Therefore, there was virtually no significant acceleration of growth in private consumption. In 2015. Private consumption increased by 3.1%, and it should be emphasized that the household did not receive more support from family benefits. Even taking into account that the payment of these benefits came at the end of the second quarter. Could expect stronger growth in private consumption. Despite the continued increase in inventories (in the second quarter. This year. Their contribution to annual GDP growth amounted to 0.5 pts. Per cent. Compared to 1.3 pts. Per cent. In the first quarter. Br.), Domestic demand growth slowed down from 4.1% y / y in the first quarter. this year. to 2.4% y / y in the second quarter. this year. In our opinion, the deepening decline in investment in the second quarter. Not only due to delays in launching infrastructure projects co-financed from EU funds, but also from the increased business uncertainty, which discourages them to increase production capacity. This situation is a serious warning to overly optimistic forecasts of economic activity in the near future, in particular the government forecasts. Many times we mentioned that the economic recovery, which is not accompanied by increased investment activity of enterprises has a fragile base. In our opinion, the causes of insecurity enterprises should be sought both in external factors, such as, among others, the risk of collapse of economic growth in China and the euro zone, but also domestic factors, especially fiscal expansion, which, without restrictions on public spending threatens fiscal crisis. It’s probably among for this reason, companies wanting to pursue current orders decide on hiring new employees, which in case of problems slow down, rather than starting new projects whose profitability is fraught with considerable risk. For now, we maintain our forecast of GDP growth throughout 2016. By 3.2%. However, given the probably worse fiscal indicators in 2016. Than it currently assumes the government, we believe that next year, the excess over the whole public sector limit of 3.0% of GDP begins to border on certainty. In our view, the structure of GDP growth in the second quarter. Should prompt the government to concrete action significantly reducing the public finance deficit next year. Otherwise, the uncertainty of investment firms can only deepen, “- chief economist at Bank Plus Wiktor Wojciechowski.
” Today, for the first time we met growth structure and the two things are striking: large decline in investment (-4.9 percent. yoy) and, consequently, the value added in construction (-9.6 per cent. yoy). At first glance, these are bad prognosis for the economy, but in our opinion, does not spoil the prospects for growth in the coming years. The fall in nominal investment was compared with the second quarter of 2015 of 3.5 billion zł. In the same period, expenditures of two major parts of the public sector decreased by 7 billion zł (the state budget of 3.4 billion zł and local governments 3.6 billion zł). This means that in the rest of the economy, including the private sector, investments increased compared to last year and it’s a decent rate of about 5 percent. yoy. The thesis of undermining the foundations of long-term growth is so far exaggerated. Given that the slowdown in investment in the public sector is associated largely with the cycle of spending of EU funds, so it is temporary, we expect a significant improvement in the coming quarters. If we add to this very dynamic export (growth of 10.9% yoy) and industry, as well as a decent seasonally adjusted GDP growth, the overall image of the second quarter looks much better than the first impression. Slightly below expectations fared private consumption – as yet not an impulse 500+ pierced on its dynamic growth. However, given that the payment of benefits began during the second quarter, expectations were somewhat exaggerated. We expect that the third quarter will bring a significant change here. We expect that in the third quarter, GDP growth will accelerate to 3.5 percent. yoy. You can not see yet the need to act for the MPC, in particular lower interest to improve the investment – difficult to expect a reaction of public investment at lower rates. We expect that the parameters of monetary policy will remain unchanged for several more quarters, “- chief economist at Bank Gospodarstwa Krajowego Tomasz Kaczor.
” The dynamics of private consumption (3.3% y / y) was slightly better than the result for the the first quarter (3.2%), and total consumption growth accelerated from 3.4% y / y in the previous quarter to 3.5% y / y in 2Q16. Negative surprise is so deep (-4.9% y / y after -1.8% y / y in the previous quarter) decline in investment, although it remains consistent with recently published data on. Investment medium and large companies (they recorded 7.1 % y / y decline in total investment in the first half of this year, with a decrease in expenditure on buildings and structures by 14.7% y / y in the same period). General uncertainty as global (Brexit, uncertainty concerning. Prospects for the economies of Euroland) and local (on tax policy and regulatory framework of the new government) translate into a deposition by the company’s decision to make new investments – despite the very good financial results, despite the very high in many industries capacity utilization, and despite the tightening labor market situation (rising wage pressures, the increasing difficulty of finding suitable employees). Unfortunately, there is little indication that the corporate sector had clearly accelerate investments in the coming months, which will put an a shadow over the pace of economic growth in the second half of the year. Positive remains strong labor market, translating into strong consumer demand. In this regard can be expected to further accelerate in the second half of the year, mainly due to a clearer disclosure of the effects of the program ,, 500+ Family “, perhaps due even better consumer sentiment, supported by a systematic increase in wages and a growing sense of employment security (as decline in the unemployment rate). Support for the growth is the foreign trade balance: in the second quarter, exports rose by 10.9% y / y, which was a clear acceleration in relation to 6.9% y / y in the first quarter, with a relatively stable import growth (9 , 9% y / y in 2Q16 in relation to 9.3% y / y in 1Q16). This resulted in 0,8pp positive contribution of net exports to GDP relative to -0,9pp contribution in 1Q16. in the first half net export contribution to GDP It was zero. in the second half of the year, the contribution of net exports may prove to be neutral or even slightly positive (relative to previous assumptions about the negative contribution of approximately -0,4pp in the whole year). the data – as consistent with expectations – are neutral for the current situation on the bond market, although in the medium term may prove to be slightly positive, pointing to slightly weaker growth path than previously assumed. As for our forecasts of GDP growth, the revision will be done in the next edition Makrokompasu (Friday MPC), while likely to be revised down forecasts for 2016 from the current 3.5% y / y (probably 0,2-0,3pp) while maintaining forecasts for 2017 to 3.3% “- chief economist at Bank Pekao Marcin Mrowiec.
” economic growth was generated primarily by private consumption (which added 2.0 percentage points to GDP) and net exports (contribution 0.8 pp). The positive surprise was exports, which rose in real terms by as much as 10.9% y / y – the highest in more than five years. Down surprised while the investment, which fell at a pace most of the fourth quarter. 2012 – by almost 5% y / y, below the lowest forecast on the market). Overall, GDP data do not bring much new to assess the economic situation. Private consumption should further accelerate in the second half of the year (an additional increase in income following a full payout for children) investment growth should improve, though it may remain in the red until the end of the year. On the other hand, the positive contribution of net exports can be difficult to maintain because of the likely slowdown in export growth (and perhaps acceleration of imports). In sum, we are not changing our forecast to sustain economic growth close to 3% y / y in the next quarters “- the analysts of BZ WBK.
” While the biggest mistake of our forecast concerned the gross fixed capital formation, is by far the more surprising is lower than expected growth in private consumption. In terms of investment, you can identify the factors that influenced their clear limitation. Weaker investment results companies are probably the effect of: – the reduction of large investment projects in the energy sector, – reduction of growth after a period of high activity in the field of replacement investments in companies l. 2014-2015 – higher uncertainty of business activities due to changes in tax – regulatory (m.in . according to reports NBP. economic situation in enterprises). Very weak data on. Public investment is the result of the completion of the projects co-financed by the EU and the so-called. ,, Old “EU perspective and at the same time the lack of implementation on a larger scale projects co-financed from EU financial perspective for 2014-2020. Given the prospect of speeding up the disbursement of EU funds (public investment), generally stable economic growth prospects and pursued by us only periodic effect increase the uncertainty of business activity, we believe that although the scale of adjustment on the investment side is strong, it also has a temporary nature. it is difficult to indicate whether the deepening decline in investment companies in the second quarter. (compared with the figures for the first quarter.) due to the deepening decline in investment public or private. the data for. investment companies indicate rather the maintenance of weaker data from the first quarter., while available only part of the data dot. public investments (investments LGUs and capital expenditures of the state budget) also suggest a rather maintenance of weak data than their deterioration . So we have to wait for the publication of the full data on. capital expenditure of the public sector. We still believe that in the second half. year investment growth improved (ie. no longer negative) due to a considerable reduction in the statistical reference base for public investment. In 2015. Public spending to accumulate in the first half. year, with significantly weaker results in the second half. year, assuming that there will be a stronger current expenditure cuts should translate into improved growth rate on an annual basis. Of course, for stronger investment growth, which translates into a solid contribution to GDP growth will be necessary to launch projects co-financed from EU funds, which we expect in 2017. In the second quarter. Private consumption growth rebounded only slightly. Although, of course, in this period the impact of run ,, 500+ Family “on household income was still small, the same increase in income from work at such a low inflation translated into a robust increase in real income dynamics, hence the surprise result of the relatively weak private consumption. regardless of the data from the second quarter. quarter maintain expectations of very strong growth in private consumption growth from the second half. year. Taking into account the effects of stronger growth in the wage bill and so strong impulse income which is the payment of funds under the program ,, 500+ Family “real dynamics of household income households will increase during this period near the levels recorded in the period of dynamic economic recovery in 2006-2007. For this reason, we expect stronger private consumption accelerated in the second half. 2016. And in the first half. 2017. Sam consumption growth during 2017. Will decrease at a higher base of comparison and the expected increase in inflation declining real income growth of households domowych.Przy weaker data on. Domestic demand (investment and private consumption) in the second quarter. Was relatively weaker increase in demand for imported goods. At the same time in the second quarter. Clearly on the plus side he surprised the growth of exports. Given the slight slowdown in GDP growth in the euro area in the second quarter. And a further deterioration of data from the Chinese economy does not expect to maintain such good results in exports in the second half. year, but figures for the first half. he showed a clearly favorable trends in foreign demand. We expect that the slowdown in export growth and an acceleration of growth in domestic demand (consumption and recovery in stabilizing the data on. Investment) will translate into a significant drop in the contribution of net exports to GDP growth. Considering the above, we expect GDP growth in the second quarter. Towards 3.5% y / y, once strongly accelerate private consumption, and the statistical base effects will not be as gravitate annual investment growth. Stronger acceleration of public investment, we expect only in 2017. When will launch large-scale investment programs co-financed from EU funds in the new EU financial perspective. If this assumption materialize, also in 2017. It will be possible to maintain a stronger GDP growth around the level of 3.5 y / y, although the impact impulse consumer will no longer raise additional GDP growth. Of course, these projections are based on the assumption of a relatively stable situation in the external environment of the Polish economy, the scale slight slowdown in GDP growth in the euro zone in 2017., Avoiding the scenario of a stronger slowdown of China’s economy. Indeed, we believe that weaker business sentiment (and thereby reducing the investment) are not a reaction to the downturn stronger, but the effect of factors periodically. Although the results of dot. Investment dynamics may look alarming, we believe (based on the above arguments), I still do not consider them a lasting effect. For this reason, we do not expect that because of this MPC decided to change the current monetary policy stance (ie. A long period of low interest rates), especially given the clearly favorable situation on the domestic labor market and very good prospects for private consumption. Even if the data were published for the Council disturbing, probably the majority of MPC members will want to read the data dot. Activity of the national economy in the third quarter. To verify the thesis of a strong pro-growth effect of higher income households. Still because the good data on. Exports and consumption is difficult to conclude that the limitation of business investment is cyclical “- analysts BOS Bank.
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