February 28, 2018 / 11:01 AM / 3 months ago

UPDATE 1-Polish investment jump drives GDP growth to 6-year high

    * Polish Q4 GDP growth at 5.1 pct y/y, highest in 6 years
    * Investment up 11.3 pct, following sharp declines
    * Household consumption up 4.9 pct y/y 
    * Record low unemployment helps consumers spend more

 (Adds context)
    By Bartosz Chmielewski and Marcin Goettig
    WARSAW, Feb 28 (Reuters) - A rebound in investment together
with robust consumption propelled growth in Poland's economy to
more than 5 percent in the last quarter of 2017, its fastest
pace in six years, data showed on Wednesday.
    Growth, helped also by higher economic activity in the
European Union overall, accelerated to 5.1 percent year-on-year,
confirming an earlier estimate and among the fastest rates in
the bloc. That compared with 4.9 percent in the three months to
September.
    A new breakdown showed fourth-quarter investment added 2.8
percentage points to the growth rate and household consumption 
2.5 points. Foreign trade subtracted 0.8 points.
    Investment, seen by analysts as crucial to the growth
outlook, rose by 11.3 percent year-on-year.
    The share of investment in Poland's GDP rebounded to 25.6
percent in the fourth quarter from 17.6 percent in the third,
when it neared its lowest level in two decades.
    Poland is the largest recipient of EU cohesion funds and
some analysts have said the government's well publicised
conflicts with the EU might be discouraging firms from investing
more.
    Referring to investment and consumption, mBank economists
said in a report: "The Polish economy has entered the new year
growing quickly with two engines working at their full capacity.
This year GDP growth will exceed 4.5 percent."
    Household consumption rose by 4.9 percent year-on-year,
supported by a record low level of unemployment and wages that
have risen at their fastest pace in years.
    "Such a structure of growth, which ... decreases
inflationary pressure, has been welcomed by the (central bank's)
Monetary Policy Council," mBank said.
    The data supported arguments that interest rates would not
be changed this year, it added.
    In seasonally adjusted terms, the economy grew by 1.0
percent year-on-year in the fourth quarter, slowing slightly
from 1.2 percent a quarter earlier.

 (Reporting by Marcin Goettig and Bartosz Chmielewski; Writing
by Marcin Goettig, Editing by William Maclean and John
Stonestreet)
  
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