Poland’s economy continues to come under the spotlight, as suspicion mounts that the so-called economic miracle in CEE is drawing to a close. Both Bloomberg and Reuters cite Michal Dybula, an economist at BNP Paribas SA, who warns that the Polish Central Bank may be forced into a loosening of the country’s prime interest rates. While the current government has staked everything on reducing its public budget by an additional 2 percentage points over the next two years, this may not be prove to be feasible with the rest of Europe hanging on by a thread. Dybula warns that while the central bank is likely to pass on the opportunity it will have in early September to reduce rates, the October meeting could prove more dramatic, and he predicts a reduction by 75 bps to occur by early 2013.
