Polish Toledo

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Friday, January 28, 2011

Poland's Gold Finger


EU Gold Standard
keeping it up!
While several EU countries languish in recovery purgatory, 2010 saw Poland chalk up a 3.8 per cent growth rate making it one of the highest in the European Union.

Coming in higher than expected was due mostly to strong domestic demand. Retail was up nearly 4 percent as consumers rushed to buy goods before this year’s scheduled VAT rise. However, the deficit for 2010 is expected to be around 8 per cent of gross domestic product and overall public debt is approaching 55 per cent of GDP.

Taking GDP growth in 2009 (1.7 per cent) and 2010 together, the Finance Ministry has stressed that Poland is still the only EU country to grow in each of the two years. But analysts are become increasingly concerned about the lack of real fiscal reforms which were promised by the Komorowski-Tusk government.

If foreign investors get skittish the zloty which has outperformed the Euro could weaken.

Poland’s economy is expected to expand by about 4 percent in 2011, thanks to strong domestic demand and an increase in investment, which are likely to be boosted by the hosting of the 2012 European football championships by Poland and Ukraine.

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