Poland’s industrial production growth likely to have decelerated in May

Poland’s industrial production growth is likely to have slowed in May. According to a Societe Generale report, the nation’s industrial output growth is expected to have decelerated from six percent year-on-year in April to 5.5 percent year-on-year in May. Growth of car production dropped 1.1 percent year-on-year in May from April’s 4.6 percent that forms a risk on the downside to the forecast.

Manufacturing, which grew 6 percent year-on-year, and water supply are expected to have driven the industrial production growth. On a long-term perspective, the industrial output is likely to be strong, based on the firmer PMI data, added Societe Generale.

Meanwhile, the country’s producer price index is estimated to have risen from -1.2 percent in April to -1 percent in May. In sequential terms, the PPI index is expected to have increased 0.6 percent, noted Societe Generale. The rise is mainly driven by the increase in global oil price that was up 10.2 percent month-on month in May and decline in the Polish zloty last month.

Within other components, manufacturing sector’s prices are likely to have grown 0.7 percent on sequential basis in May, whereas mining prices are estimated to have fallen 0.1 percent month-on-month. PPI, in Poland, is expected to remain lower than zero until late 2016, according to Societe Generale.

Poland is due to release its retail sales report on Friday. Growth in the retail sales is likely to have decelerated from 3.2 percent year-on-year in April to 2.7 percent year-on-year in May. On sequential basis, retail sales growth is expected to have slowed to 0.4 percent, added Societe Generale.

Meanwhile, real retail sales growth is likely to have reached 4.8 percent year-on-year, mainly because of low consumer prices. The latest SAMAR car registrations data show that growth slowed somewhat to 20.8 percent year-on-year in May from April’s 22.3 percent.