Polish economy is slowing down

Alarming news is coming from Central Statistical Office (GUS). Polish economy has noticeably slowed down in the recent quarter. Prime Minister Szydło assures this is only temporary.

The latest statistical data indicate that the country’s GDP growth fell below 3 percent in the third quarter of 2016. This is less than most economic experts predicted. The projected growth was 2.8 percent, while in reality it was only 2.5 percent. It has been a long time since Poland’s GDP figure was this low.

Let’s remember that in the budget act the GDP figure for the entire 2016 has been assumed to be over three percent. This means the government will need to adjust the state budget accordingly.

Even though the signals about the upcoming economic slowdown have been pouring in, the Ministry of Finance are insisting their projections are still valid. However, with the difference between the expectations and the reality so big, it is likely they will need to change their minds.

Still, Mateusz Morawiecki, Polish Minister of Finance and Development, expressed an opinion that the budget is good, and the economy will improve in the fourth quarter.

What lays behind the abrupt slow-down are delays in the expenditure of EU funds. Investments, both private and public, have come to a halt. The government assures a new wave of investment projects is about to start soon and that it will give the economy a much-needed boost.

Another figures that fell below the expectations concern consumption. Spending figures rose, but not as much as the government experts hoped. From April, Polish families receive a monthly child benefit in the amount of 500 PLN. The money was expected to be spent quickly, but it appears the effect on the macroeconomic level was not that great.

Earlier this month, European Commission cut down its GDP prognosis for Poland. The institution is expecting a 3.1% growth for 2016. In 2017 it is to be 3.4%. At the same time, the Commission is projecting 1.8% GDP growth is 2016 with regard to the entire EU (1.6% in 2017).

A surprising opinion on the situation was expressed by Jarosław Kaczyński, the leader of the ruling Prawo i Sprawiedliwość party. In his view, Polish entrepreneurs supporting the opposition are halting investments in order to spite the government.

Polish Prime Minister Beata Szydło said the situation is only temporary and there are countries where GDP growth is even weaker.