Polish Retail Sales, Unemployment

From Forbes:

Polish June retail sales rise, unemployment falls

WARSAW (Thomson Financial) - Polish retail sales rose a touch faster than expected in June, adding to evidence of a pick-up in domestic demand which is expected to prompt the central bank to raise interest rates again in August.

Retail sales rose 16.2 pct year-on-year in June, statistics office data showed, up from the 14.8 pct seen in May and forecast by analysts this month.

The office also confirmed that unemployment fell to 12.4 pct last month, from 13.0 pct in May, in line with figures given earlier by the labour ministry.

Month-on-month, sales rose 3.1 pct.

Analysts said the numbers confirmed that economic growth slowed to around 6 pct in annual terms in the second quarter, from a decade-high of 7.4 pct in the first three months of the year.

They said the figures showed that demand-led pressure on prices for the ordinary consumer continued to grow but were unlikely to pressure central bank policy-makers into raising borrowing costs for the third time this year when their monthly meeting ends tomorrow.

'Pressure on price growth in retail trade is gradually mounting,' analysts from Bank Zachodni WBK said in a research note to clients.

'On the other hand, GDP growth is not exceeding its non-inflationary potential level as much as in the first quarter and inflation pressure is still moderate. The most recent data do not give explicit arguments in favour of speeding up the monetary policy tightening cycle.'

Poland's economy has maintained strong growth of around 5-7 pct over the last few quarters, boosted by sharp rises in investment that analysts hope will bear fruit in the period ahead, as the contribution of exports to growth slows.

'Growth in the second quarter is slower than in the first, but there is no reason to announce a long-term slowdown in the pace of growth,' statistics office chief Halina Dmochowska told reporters at a monthly news conference.

Central bank interest rates in Poland now stand at 4.5 pct, 50 basis points above euro zone base rates.