Poland: a Goldilocks Economy?

Poland is currently enjoying GDP growth that is very robust. Despite a recent uptick, headline inflation appears to have stabilized and the labor market remains tight. A number of factors have contributed to the country’s economic health: Domestic demand remains strong – a seasonally adjusted figure of 5.3% year-on-year in the second quarter; the central bank continues to pursue its relaxed monetary policy; and, exports to the Eurozone thrive.

For the time being anyway, Poland’s economy is well balanced with little sign of any over-heating. And, in a welcome surprise and despite pre-election promises, the government has not over-indulged in either social or populist spending.

One still has to wonder though just how the current administration will address effectively the extremely sluggish growth in fixed investments.

Source: Bloomberg

About the Author:

Michael Cohick joined VanEck in 2011. He serves as a product manager responsible for VanEck Vectors non-taxable fixed income and industry equity exchange-traded funds. Prior to joining VanEck, he worked at ING Investment Management. Mr. Cohick earned an MS from Columbia University and a BA from Goucher College.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.

Footnotes:
Investopedia: A Goldilocks economy is an economy that is not so hot that it causes inflation, and not so cold that it causes a recession. There are no exact markers of a Goldilocks economy, but it is characterized by a low unemployment rate, increasing asset prices (stocks, real estate, etc.), low interest rates, brisk but steady GDP growth and low inflation, http://www.investopedia.com/terms/g/goldilockseconomy.asp