PKO BP's chief economist sees Poland's GDP growth at 4.6 pct in 2018

Szymon Łaszewski

The Polish economy will expand at a 4.6 percent rate in 2018 and will slow down to 3.7 percent in 2019, PAP was told by Piotr Bujak, the chief economist of the country's biggest bank PKO BP.

The economic research team of Poland's biggest bank PKO BP has topped the ranking of economic forecasters for 2017 as prepared by the UK-based survey organisation Consensus Economics. Piotr Bujak is the head of the team.

Asked what determines the accuracy of economic forecasts, Bujak mentioned the ability to build formal models that reflect the behaviour of the economy but also extensive knowledge and long-standing experience in observing economic and market trends that make it possible to adjust the models.

"The point is to be wrong as little as possible rather than to hit the bull's eye," Bujak said. "To sum up, the recipe for accurate forecasts includes a bit of science and crafts, and a bit of art," he added.

The bank's current forecasts for the domestic economy are positive.

"Many institutions, such as the European Commission or the World Bank, have upgraded their projections towards the level that we've been forecasting for quite a long time. We believe that this high growth should continue this year - despite some signs indicating that the economy is losing some of its momentum, that is the euro zone and global economies, and our economy along with them. It's going to be a bit weaker in the coming years. But this is natural considering the fact that it is impossible to keep on growing at a rate that exceeds our natural capacity," Bujak explained.

Asked about the Polish economy's natural capacity, the expert put the figure at 3 to 3.5 percent of the GDP. "However, the Polish economy grew by as much as 4.6 percent last year, and this year - according to our forecast - it will grow by 4.6 percent again. In the next years it would be difficult to maintain such a high - considering our capacity - rate of growth. We believe the Polish economy will moderately slow down to 3.7 percent in 2019."

Turning to investment, the expert said it was going to get stronger, particularly in the second half of 2018. According to Bujak, investment will reach its peak this year and will continue to grow at a more moderate pace in the next years.

Public investment will dominate the sector due to the EU funding cycle, Bujak said, noting that in the past Poland had seen a close correlation between public and private investments.

Commenting on the potential impact of global economic developments, Bujak said that Poland was becoming increasingly involved in the global economy. "Therefore we will be affected by turbulence on international financial markets and by the slowdown of global economic growth," he concluded.