Warsaw, March Inflation projection of the National Bank of Poland based on the NECMOD model Economic Institute
Overview. March projection compared to November projection Changes External Polish economy. Projection Projection -. Uncertainty Risk factors Fan charts
MARCH COMPARED TO NOVEMBER Changes External Polish economy
March projection compared to November projection: CPI inflation % 7 9% % % inflation target III XI 7 8q 8q 9q 9q q q q q q q q q
Decomposition of deviations between March and November projections.....8.8........ Core inflation Food prices -. Energy prices CPI inflation -. -. -.
March projection compared to November projection: GDP % 9 8 9% % % III XI 9 8 7 7 - - 8q 9q q q q q q
Decomposition of deviations between March and November projections..8... Private consumption Gross fixed capital formation Net exports Public consumption Change in inventories GDP..8..... -. -. -. -. -. -. -.8 -.8
Projection scenario March projection: Lower economic growth A decline in GDP in the euro area Appreciation of the zloty exchange rate against its Q level Tightening of fiscal policy Changes scenario: The euro area again in a recession stage A decline of energy and agricultural commodities prices on global markets due to global economic slowdown
External GDP growth abroad Price growth abroad Interest rates abroad Agricultural commodity price index Energy commodity price index EUR/USD exchange rate Transfers from EU
Economic growth abroad (lower) XI III - - - - - - q q 7q 8q 9q q q q q q q
Inflation abroad (lower) y/y,% XI III...... q q 7q 8q 9q q q q q q q
Interest rates abroad (lower) % XI III q q 7q 8q 9q q q q q q q
Agricultural commodity price index* (lower).. XI III.......9.9.8.8 q q 7q 8q 9q q q q q q q *Global index of agricultural commodity prices consists of prices of: wheat, pork, beef, poultry, fish, rape oil, sugar, oranges, bananas, and the beverages index
Energy commodity price index* (lower).. XI III...8..8......8.8.. q q 7q 8q 9q q q q q q q *Global index of energy commodity prices consists of: hard coal, crude oil, natural gas
USD/EUR exchange rate (weaker EUR against USD). XI III........... q q 7q 8q 9q q q q q q q
9 8 Absorption of EU transfers aimed at public sector investments (mln euro) 9 8 7 7 November March 9
Polish Economy GDP and its Labour market Inflation
GDP and its Q Q GDP (y/y, %), (,), (,) Domestic demand (y/y, %), (,), (,) Individual consumption (y/y, %), (,),9 (,) Public consumption (y/y, %) -, (,7) -, (-,) Gross fixed capital formation (y/y, %) 8, (7,), (9,) Exports (y/y, %) 7,7 (,) 7, (,) Imports (y/y, %), (,9), (,) Net exports contribution (percentage points), (-,), (,9) * Seasonally adjusted data. Data for Q including expert judgment. Indicators with values higher than in the November projection are marked green, whereas indicators with lower values are marked red.
Labour market Q Q ULC (y/y, %), (,),8 (,) Labour productivity (y/y, %),7 (,), (,9) Gross wages (y/y, %), (,8),8 (,) Total employment LFS (y/y, %), (,),7 (,) Unemployment LFS (%) 9, (9,) 9, (9,) Participation rate (%), (,), (,) * Values from the November projection are given in brackets (seasonally adjusted data). Indicators with values higher than in the November projection are marked green, whereas indicators with lower values are marked red.
Inflation Q Q CPI inflation (y/y, %), (,), (,8) Core inflation (y/y, %), (,), (,9) Food price inflation (y/y, %), (,), (,) Energy price inflation (y/y, %) 8,9 (8,9), (8,) * Values from the November projection are given in brackets (seasonally adjusted data). Indicators with values higher than in the November projection are marked green, whereas indicators with lower values are marked red.
FOR - GDP and Labour market Exchange rate Inflation
GDP (similar in the short run, lower in the long run) y/y,% 9 8 XI III 9 8 7 7 q q 7q 8q 9q q q q q q q
GDP: decomposition 7 Consumption Change in inventories Gross fixed capital formation Net exports 7 GDP - - - q q q q q q q -
Gross fixed capital formation (similar) y/y,% XI III - - - - - - q q 7q 8q 9q q q q q q q
Gross fixed capital formation: decomposition GFCF enterprises GFCF public sector GFCF housing GFCF - - - q q q q q q q -
Private consumption (lower) 8 7 y/y,% XI III 8 7 q q 7q 8q 9q q q q q q q
Trade with other countries Net exports contribution (percentage points) Exports (y/y) (%) Imports (y/y) (%) 7 - - - - - - - q q 7q 8q 9q q q q q q q -
Net exports contribution (lower) XI III - - - - - - q q 7q 8q 9q q q q q q q
Employment (lower) y/y,% XI III - - - - q q 7q 8q 9q q q q q q q
Unemployment (higher) 8 % XI III 8 8 8 q q 7q 8q 9q q q q q q q
Gross wages (lower) y/y,% XI III 8 8 q q 7q 8q 9q q q q q q q
Unit labour costs (higher in the short run, lower in the long run) y/y,% XI III 8 8 - - q q 7q 8q 9q q q q q q q
Exchange rate (weaker) Real effective exchange rate (REER). XI III............. q q 7q 8q 9q q q q q q q
Import prices (excluding oil and natural gas) y/y,% XI III - - - - - - q q 7q 8q 9q q q q q q q
Food and energy prices inflation Food prices inflation (%) Energy prices inflation (%) 8 8 - - q q 7q 8q 9q q q q q q q
Core inflation and CPI inflation* CPI inflation (%) Core inflation (%) - - q q 7q 8q 9q q q q q q q * Core inflation does not include food, beverages and energy prices.
OF THE
Risk factors The scale of impact: *** high ** medium * low
Risk area Description Impact External and exchange rate An increase in uncertainty due to worsening growth prospects in developed countries, especially in EU members. The situation on the global financial markets including impact of rising soveregin debt of some euro area countries and liquidity constraints of a few european banks. The zloty exchange rate path, highly dependent on the future situation in the euro area. The reaction of governments and central banks of developed countries, i.e. the scale of a possible resumption of fiscal and monetary stimulus. The agricultural and energy commodities prices on the global markets. Scale of impact inflation GDP ***
Risk area Description Impact Domestic demand Historically stable growth of individual consumption, high financial liquidity of enterprises, rising capacity utilization possible higher private investment and consumption. Probable more optimistic assessment of Poland s credit standing and higher inflow of capital. inflation GDP Scale of impact ** Food and energy prices in Poland Uncertain impact of European regulations on prices in Poland, particularly those concerning climate and energy package (unknown amount and price of carbon emission allowances for the Polish economy, lack of decision regarding derogation of the Polish energy sector). Future tariff policy of the Energy Regulatory Office. Regulatory activities on the food market inflation GDP ** Conclusions inflation GDP ** *
Inflation projection March 7 9% % % central path inflation target 7 - - 9q 9q q q q q q q q q q q
(%) Probability distribution for inflation below,% below,% below.% below the central path in the range (,%;,%) q,,,,, q,,,,, q,,,8,,8 q,,,,, q,,,,9, q,,7,9,8,7 q,,,7,8, q,8,,7,8, q,8,,79,9, q,,,8,9,8 q,7,,8,8,7 q,7,,8,8,
GDP projection March 9 8 7 9% % % central path 9 8 7 - - - - 9q 9q q q q q q q q q q q
Data after cut-off date (..) Lower than expected CPI inflation index in January Zloty appreciation in February An increase in oil and gas prices on global markets in February These data increase the probability of the inflation running in the short run below the central path (assuming unchanged GDP path, they lower the forecast of CPI y/y by.-. p. points in and by.-. p. points in )