Fitch lowers Poland GDP growth forecast to 5.2 percent

Fitch lowers Poland GDP growth forecast to 5.2 percent

In a report, the agency said that Poland's GDP growth forecast for this year has been revised up to 5.2 percent from its previous estimate of 3.3 percent.

A higher starting point means that growth this year is likely to be 5.2 percent 3.3 percent before the expected slowing of the economy in the coming quarters, Fitch said.

The forecast also takes into account the inflow of funds from the EU's Recovery and Resilience Facility RRF. Fitch predicts that the Polish economy will grow 3.0 percent in 2023, below the previous forecast of 3.3 percent, and will slow down to 2.3 percent in 2024.

The agency says real income will go down along with accelerating inflation, tighter monetary policy, trade disruptions and growing economic uncertainty.

The inflationary situation will force the National Bank of Poland to tighten its policy, Fitch said. The agency expects the central bank's reference interest rate to be at 7.0 percent at the end of the year and at 6.5 percent next year, with inflation at 11.0 and 7.5 percent at the end of the year.

Fitch highlighted the good situation on the Polish labour market and an increase in domestic consumption due to the influx of refugees from Ukraine as well as a strong wage hike of 12 percent in March PAP emer jchch.