The Polish Academy of Sciences’ Institute of Economics (INE PAN) is rather optimistic in its 2008 economic forecasts despite an expected slowdown in GDP growth against 2007. INE PAN predicts that Poland’s GDP will reach about 5.7% over the entire year, 1 percentage point below 2007. The Institute’s latest prognostic model sets GDP growth at 5.9% in the 1st quarter, with a steady decrease in following quarters (5.7% in the 2nd and a drop by 0.1 percentage points in the 3rd and 4th).

The situation will be similar on the domestic consumer market, which will rise by about 7.4% over 2008, 1 percentage point below 2007. Despite this slowdown the domestic market will continue as the main powerhorse of Polish economy. It must be noted that such a high share of the domestic market in GDP growth is a very positive signal in light of today’s insecurity on global markets.
Investment outlays will continue rising steadily and at a relatively high pace throughout 2008 but will not exceed last year’s level. Throughout the year invewstment spending is expected to rise by about 18% against 20.4% in 2007.
In 2008 exports will still be rising slower than imports, in effect of which the share of foreign demand in GDP growth will be negative. According to the INE PAN model the 1st quarter of the year saw a rise in exports by 7.7%, and imports by 11.6%. Both exports and imports are expected to rise at an increasing pace in the following quarters.

In 2008 consumption will grow at a relatively steady pace, largely due to current and expected improvements on the labour market (especially wages rising faster than productivity). Nonetheless rising inflation will probably bring consumption growth slightly below the previous year’s pace. According to INE PAN consumption over 2008 will rise by about 4.5% and individual consumption by about 5%.
Industrial production will rise at a steady pace throughout 2008, although slower than in 2007. According to the INE PAN model industrial production will rise averagely by about 8.1%, more than 1.5 percentage points below 2007.