Polish economy likely to grow 3.5 pct to 4 pct in 2016

Polish economic outlook continues to be good. The economic growth is likely to reach 3.5 percent to 4 percent this year, noted KBC Market Research in a research report. Keeping low interest rates and a weak zloty aside, the Polish economy is likely to attract support from the new government’s policy measures. This might boost private consumption. Therefore the risks come from a likely worsening of the external environment, mostly in Russia, China and other emerging markets.

Meanwhile, the National Bank of Poland is likely to keep official rates stable; however, the risks of additional rate cut have risen, noted KBC Market Research. It is mainly due to the inflow of cheap euros, stronger currency and current deflation. Therefore, if the PLN appreciates, there is a chance for the National Bank of Poland to loosen its monetary policy.

The Polish zloty is expected to be mainly driven by sentiment in emerging markets and the European Central Bank or the US Fed policy actions, according to KBC Market Research.