"Poland’s softer-than-expected activity data for January suggest that the economy started 2023 on weak footing and we expect it to struggle for momentum over the first half of the year as high inflation and tight monetary conditions continue to bite," Capital Economics said in a note. (Reporting by Jason Hovet in Prague; editing by Barbara Lewis)
Feb 21 (Reuters) - Polish retail sales at constant
prices fell 0.3% year-on-year in January, data showed on
Tuesday, slipping for the first time in two years to highlight a
weak start to the year for central Europe's biggest economy as a
slowdown takes hold.
The drop in retail sales was against expectations for a 1.0%
gain and follows data on Monday that also showed a
below-forecast 2.6% year-on-year increase in industrial output
in January.
Faced with decades-high inflation and tight central bank
policy, central Europe's economies have weakened swiftly. The
Czech Republic and Hungary already tipped into a technical
recession at the end of last year.
Poland's economy fell in the fourth quarter, for the second
time in 2022, although it has avoided consecutive declines so
far.
"Further economic slowdown is clearly visible," Bank
Pocztowy economist Monika Kurtek said. "We are dealing with
weakening consumer, investment and foreign demand."
The data is unlikely to tilt the central bank either way as
it seeks to hold interest rates steady. The main policy rate
stands at 6.75% after a series of hikes from 0.10% in 2021-22.
Inflation climbed to a lower-than-expected rate of 17.2%
year-on-year in January, staying under a high seen in October,
while central bankers have said it is too early to discuss rate
cuts.
Price pressures remain strong and corporate wage growth is
still showing double-digit growth.
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