Polish economy to grow 2.7 percent in 2010: EC forecast

09:46, May 06, 2010      

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Poland's economy will grow 2.7 percent in 2010, the highest growth in the European Union next to Slovakia, the European Commission (EC) said in economic forecast published Wednesday.

Poland's budget deficit is expected to grow to 7.3 percent of the GDP, according to the forecast, quoted by the PAP news agency.

Poland was the only country in the EU to have posted positive economic growth in 2009, the EC stressed.

"The exceptional achievements during the crisis reflects favorable factors, such as strong fundamentals at the start of the crisis, the strong financial sector, a relatively low level of economy opening, significant depreciation of the zloty in the first stage, good effect of real wages on unemployment and adequately fast reaction on the part of monetary and financial policies," the forecast said.

Exports and foreign capital inflow are perceived as the basis of the growth. In 2011 household demand and investments will grow considerably. "Many projects will have to be completed before Euro 2012 (European soccer championship)," the EC added.

Among threats the European Commission listed: difficult access to credits which may lower investments and private demand.

"In addition the situation of public finances can negatively affect moods on the markets and increase costs of credit in the private sector," the EC stressed.

The expected deterioration of the situation of public finances in 2010 chiefly reflects higher public spending which is not fully compensated on the side of incomes, the EC said.

Public debt will grow to 53.9 percent in 2010 and 59.3 percent in 2011.

Source: Xinhua
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