Analysts were eagerly awaiting the Purchasing Managers Index figures yesterday, as many see it as an indicator of business sentiment, and hence economic growth. A higher index means more businesses are buying goods and supplies, meaning they are ramping up production - presumably in response to some demand or expected demand. In June, PMI was at 43 points, and most analysts had expected a slight improvement in July to between 43.5 and 43.8. But the numbers were far better than that, and came in at 46.5 points. That seems to indicate that businesses are bullish about the economy, and beleive that they can produce more than they were at the nadir of the slowdown.
As if on cue, the IMF also announced yesterday that it may revise up its GDP growth forecast for Poland. It currently foresees growth of 0.7% this year, and 1.5% in 2010. Poland's GDP grew by 0.8% in the first quarter of this year.
As for the złoty, it continues its rise, and is well under zł.3.00 to the dollar - at zł.2.88 today. Puls Biznesu reports that the złoty is close to breaking records, and says that the analysts it surveyed expect the złoty to continue strengthening, after a small correction. That small correction will happen this month, the paper says, and the złoty will be just a tad weaker than it is now against the dollar, euro and Swiss franc. Nevertheless, it is expected to remain far stronger than it was at the end of last year and the beginning of this year.
One interesting thing to consider is, if this really is the beginning of a recovery (which is far from certain), what will it mean for the PO government, which has been slowly but steadily losing popularity? Will they be able to claim their "economic miracle" and keep taxes low? It is important to remember that only last week President Kaczyński signed Poland's anti-crisis bill, and we are not likely to see its effects until the beginning of next year. Will the recovery already be in full swing then? Will we find that the government had unnecessarily spent billions on a recovery bill that was not needed, or was implemented too late? Will the resulting gaping deficit mean that it will have to raise taxes in the middle of a fragile recovery?
We will just have to wait and see to get the answers.
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