In response to the worse-than-expected performance by Poland’s manufacturing sector in May, JP Morgan has cut its GDP growth forecast for the country from 3.3 percent to 3.1 percent year-on-year for Q2. JP Morgan said it expects the Polish National Bank (NBP) to make additional interest rate cuts this year in an effort to avoid deflation.
“Poland’s manufacturing sector fell in May by 1.5 percent month-on-month, casting a shadow on previous growth. Even though the recent reading of the PMI index has signalled we’ll be observing some kind of a slowdown, the actual drop of Polish manufacturing in May proved worse-than-expected, forcing us to revise our forecast,” JP Morgan analysts said.
JP Morgan expects the (NBP) will leave interest rates untouched next week. In the long-term, however, NBP is widely expected to change its course in order to ease monetary pressure before the end of the third quarter.
