In its Summer Interim Forecast for 2018, the European Commission has increased its GDP forecast for Poland to 4.6 percent, up 0.3 percentage points from the spring, and estimates the country’s economy will grow by 3.7 percent in 2019.
The Commission meanwhile predicts that prices will rise by 1.3 percent in 2018, quickening to 2.6 percent next year.
In Europe, growth is to remain strong at 2.1 percent, but this is a downgrade from the Commission's spring forecast of 0.2 percentage points.
The highest growth is likely to be seen in Central European and Baltic Countries, according to Pierre Moscovici, the EU’s economic commissioner said on Thursday.
While growth will remain “solid,” the downward shift in the forecast “shows an unfavorable external environment, such as growing trade tensions with the US, can dampen confidence and take a toll on economic expansion,” explained Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue.
Rising fuel costs were the main reason that inflation forecasts were raised to 1.7 percent for Euroland.
Oil fuelling inflation
Mr Moscovici said that in dollar terms, the price of a barrel of oil is assumed to rise 30 percent in 2018, which means that in euro terms their estimate has had to rise by 10 percent because the EUR/USD has fallen over recent months.
The National Bank of Poland is to update its forecasts for the economy on July 16. Its March report puts growth for 2018 at 4.2 percent and 3.6 percent for 2019. Meanwhile, the World Bank forecast 4.2 percent and 3.7 percent respectively at the end of April.