TOP MACRO THEME(S):
- MPC changes nothing: The Polish MPC kept interest rates on hold. According to NBP governor there was no discussion about the end of the cycle, all the more about rate cuts.
WHAT ELSE CAUGHT OUR EYE:
- Manufacturing PMI in April declined to 46.6 from 48.5 in March as the sector’s condition was the weakest in 2023. Weakness was evident across all major subindices. Prices paid for inputs fell for the first time in 7 years, and the fall was broadly matched by a decline in output charges.
- Registered unemployment rate in April fell to 5.3% from 5.4%, on a MinLab estimate. Lower demand for labour has so far reduced the number of vacancies and, to a small extent, employment, without unemployment rise.
- The NBP Quick Monitoring survey (available here in Polish) shows that the stance of enterprises has been deteriorating for the 5th quarter in a row. Revenues fell in q/q terms (to a greater extent from domestic sales), while cost growth slowed down. Inventory cycle has been gradually reversing. Investments were growing, but probably mainly those forced by the energy transformation. Labour market has been cooling down - wage pressure eased slightly. Companies found it harder to pass on higher costs to final prices.
- It was announced that on June 15 the Court of Justice of the European Union will issue a judgment in the case concerning remuneration for the use of capital after the cancellation of the CHF loan agreement.
THE WEEK AHEAD:
- Final CPI for April will likely confirm a large inflation drop caused by energy and food prices. Core inflation has likely inched down, eventually.
- The rapid CAB improvement was continued in March as export kept growing while import fell. 12-month rolling CAB has likely improved to -1% of GDP.
- Flash GDP figures for 1q23 will likely show a decline in y/y terms (PKOe: -0.6%) amid consumption slump and unwinding of inventories, while net exports has likely had positive contribution to GDP growth rate.
NUMBER OF THE WEEK:
- PLN 726bn – cost of investment outlays on new energy sources in Poland needed by 2040, on government estimates.