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Poland's growth forecast downgraded by EC

04 November 2014 23:49 (UTC +04:00)

Baku-APA.Poland's economic growth is predicted to go down to 2.8 percent in 2015 from the 3.0 percent expected in 2014, the European Commission (EC) said in a report released Tuesday, citing weak eurozone and tensions in eastern Poland hampering the country's growth, APA reports quoting XInhua.

In May, the EC expected a 3.2 percent expansion rate in Poland's economy in 2014 and 3.4 percent in 2015.

Despite this decrease, Poland will be the fourth fastest-growing economy in the EU this year, after Ireland (4.6 percent), Hungary (3.2 percent) and the UK (3.1 percent).

"However, the slowdown in export growth and investment is expected to be temporary as the negative impact on the Polish economy from the Ukraine-Russia conflict is assumed to peter out in 2015," the EC said in the report.

Private consumption is expected to hold steady and the labour market will likely continue to improve, with unemployment forecast to fall to 9.3 percent in 2015 from 9.5 percent in 2014.

Poland's deficit is to decline to 2.9 percent of GDP in 2015, down from 3.4 percent this year on the back of improved economic activity and better tax revenues.

"On the expenditure side, some new measures which will increase social spending (including higher indexation of low-income pensions and a tax credit for families with children) will partially offset other expenditure savings, in particular the partial freeze of public wages," the EC said.

Poland's public debt is projected to reach 50.2 percent of GDP in 2015, but potential currency rate fluctuations could affect this calculation.

This year's inflation is anticipated to reach 0.2 percent and edge up to 1.1 percent in 2015.