Fitch cuts growth forecasts for Poland. What about interest rates?

13 mark 2023, 21:27 | PAP

| Ann

| PAP

Fitch has lowered its economic growth forecast for Poland in 2023, according to the latest agency report. “High inflation eats up real income and lowers consumption,” he says. It also shows how much interest rate cuts borrowers can count on.

• Fitch lowered the forecast of Poland’s GDP growth in 2023 to 0.7 percent. from the previously forecast 1.1 percent.
• Fitch analysts forecast a decline in inflation in Poland at the end of 2023 to 10.5 percent. Let us recall that the President of the National Bank of Poland recently assessed that inflation at the end of the year will amount to around 7%.
• Fitch estimates that interest rates will remain unchanged until the end of this year and indicates how much interest rate cuts borrowers can count on in 2024.
• More such information can be found on the Onet.pl homepage

“The energy crisis in Europe turned out to be less severe than expected – energy commodity prices are falling sharply, so our forecast assumes a better start to 2023. Despite this, we now forecast 0.7% GDP growth instead of December’s 1.1%. – we read in the latest Fitch report.

“Domestic demand is likely to turn out weak, with net exports supporting growth. High inflation eats up real income and lowers consumption. In addition, household credit growth is slowing sharply (mortgage and consumer credit) and showing negative growth year-on-year.” .

The agency indicates that interest rate increases in Poland to 6.75 percent. negatively affect household spending and corporate investment decisions.

“At the same time, a significant inflow of foreign direct investment and the expected increase in public spending (especially on defense) will provide significant support, which will result in an increase in total investment in 2023.” we read.

Interest rates in Poland. When are the discounts?

Fitch analysts forecast a decline in inflation in Poland at the end of 2023 to 10.5 percent. Let us recall that during the press conference last week, the President of the National Bank of Poland, Adam Glapiński, estimated that inflation at the end of the year would amount to around 7 percent.

Fitch also forecasts that interest rates will remain unchanged this year. Then they will be lowered by 175 basis points throughout 2024.