What else caught our eye:
- GDP growth accelerated to 7.3% y/y in 4q21 (vs 5.3% in 3q) and industrial output skyrocketed in January (19.2% y/y) with energy production surging by 51.6% y/y, both shifting risks for 2022 GDP forecast to the upside.
- Labour market remains tight. Employment in the corporate sector grew by 2.3% y/y in January while wage growth slowed to 9.5% y/y suggesting that 11.2% in December was a one-off driven by adjustments to the Polish Deal.
- CJEU, as expected, dismissed actions brought by Poland and Hungary against the Rule-of-Law Conditionality to safeguard the EU budget. The verdict does not change the current state of the relations between the EU and Poland, but may, paradoxically, lead to a decision of the EuCo to approve Poland’s Domestic Recovery Plan (KPO) and then have it under control of the newly adopted conditionality mechanism.
The week ahead:
- Retail sales likely accelerated in January, mostly on calendar effects, but the trend remains strong, showing that consumption demand is still solid despite a deterioration in consumer sentiment due to elevated inflation.
- Construction grew only modestly in January, awaiting the commencement of public spending funded from the NextGenEU.
- Registered unemployment rate rose to 5.6% in January, in line with seasonal pattern. The labour market remains extremely tight.
- M3 money supply growth decelerated further in January. The banking sector data will show further acceleration of corporate loans driven by working capital loans funding the purchases of inventories.
- Fitch will likely affirm Poland’s rating, but it may point at possible negative implications of a halt of the EU funds inflows.
Number of the week:
- -3957mn EUR – the highest monthly CA deficit since 1999, due to increasing prices of energy commodities, as well as industrial supplies pushing up nominal imports, as well as a new (plastic) tax paid to the EU.