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WARSAW, April 27 (Reuters) - The World Bank said on Friday it has raised its forecast for Poland’s 2018 gross domestic product growth to 4.2 percent from 4.0 percent seen at the beginning of the year, with the expansion expected to be fuelled by private consumption and investments.
“Economic growth in 2018 in Poland is projected to reach 4.2 percent, compared to 4.6 percent last year. ... Looking ahead, the Polish economy will probably grow at less than 4 percent - with 3.7 percent growth forecast in 2019 and 3.5 percent in 2020,” the bank said.
“Record-low unemployment is stimulating wage increases and supporting consumption. Also, investments are trending up,” Carlos Pinerua, World Bank Country Manager for Poland and the Baltic States, was quoted as saying in the bank’s statement.
In its January forecast, the bank projected Poland’s growth at 4.0 percent in 2018, 3.5 percent in 2019, and 3.1 percent in 2020.
But the bank pointed out risks that threaten Polish economic development such as labor force shortages in sectors like construction and IT.
“Additionally, in the medium term, the outlook for public finance may deteriorate due to large social spending and shifting demographics. Also, election time is drawing near, which often stimulates spending,” the bank said.
The World Bank anticipates a 2.0 percent of GDP budget deficit in 2018 and forecasts that the deficit may approach the three percent threshold in 2020.
The current account is likely to return to a small deficit of 0.3 percent of GDP in 2018, as opposed to a small surplus in 2017, as robust household consumption, higher investment, and a firming in global commodity markets push the volume and cost of imports up. (Reporting by Marcin Goclowski)