TOP MACRO THEME(S):
- Is it the end or just a pause? The Polish MPC left NBP rates unchanged, but contrary to the CNB and MNB has not declared the end of the cycle.
WHAT ELSE CAUGHT OUR EYE:
- Manufacturing PMI rebounded to 43.0pts in September from 40.9pts in August, as production and new orders declined at a slower pace. Despite the unexpected rise in the overall PMI index, the details are not very positive and encouraging, with further deep declines in production and orders amid increasing cost pressure and weakening demand for labour.
- Revised GDP data showed much larger economic growth in 2021 (6.8% vs 5.9% reported earlier) and shallower recession during the pandemic in 2020. The revised data for 2021 included stronger growth of public and private consumption and higher exports while investments growth proved to be weaker than earlier estimated (2.1%, -1.7pp). At the same time, investments in 2018-2020 were notably higher than previously reported. The revision of nominal GDP was minor (less than 0.2%), so it does not affect key macro ratios like fiscal deficit or public debt to GDP.
- According to revised balance of payments data the CA deficit after July was 3.5% of GDP (vs. 4% reported previously). At the same time, the 2021 deficit was revised up to 1.4% of GDP from 0.7%. The revision covered the two main elements: transactions of non-resident VAT payers in Poland were excluded from trade in goods and a new approach to EU transfers was adopted. As a result, the trade gap has widened, while the secondary income balance has improved. These changes reduced size of the errors and omissions balance.
THE WEEK AHEAD:
- In final CPI figures for September the key focus of attention will be on reasons behind surprisingly strong rise in core inflation (to 10.6-10.7% y/y).
- Balance of payments for August will reveal monthly data (not known yet after large revisions to quarterly numbers described above) and give a hint what is the current scale of CAB deterioration.
NUMBER OF THE WEEK:
- 0 – number of vacant places in the Monetary Policy Council after Sejm approved Iwona Duda and Gabriela Maslowska as new MPC members.