Weekly financial markets review

      
    
Weekly financial markets review
Aktualności / 2022-11-23 / autorzy: Piotr Minkina


Key information from the past week

1. Poland: GDP flash estimate
As per the flash estimate of GDP released by Statistics Poland [GUS], Poland’s real and not seasonally adjusted GDP rose by 3.5% YoY, while seasonally adjusted real GDP increased by 4.4% YoY and 0.9 QoQ respectively.

Source: GUS. Own compilation.

Source: GUS. Own compilation.

2. Poland: Inflation
Statistics Poland confirmed the preliminary consumer price estimate, as per which consumer prices in Poland in October 2022 increased by 17.9% YoY (or 1.8% MoM). Energy carriers and prices of food and non-alcoholic beverages had the greatest impact on annual and monthly consumer prices. Prices of fuel for private means of transport rose MoM after declines reported as of June. Core inflation rose from 10.7% in September to 11.0% in October.

Source: GUS. Own compilation.

3. Poland: Inflation and GDP forecasts
The National Bank of Poland (NBP) published the November Inflation Report containing the latest inflation forecast, as per which the annual inflation rate, in accordance with the communication released after the Monetary Policy Council (MPC) meeting, will, with a 50% probability, fall within the range of 14.4% to 14.5% in 2022 (vs. July 2022 forecast of 13.2%–15.4%), 11.1% to 15.3% in 2023 (vs. 9.8%–15.1%) and 4.1% to 7.6% in 2024 (vs. 2.2%–6.0%). This means a slight increase in the average rate of inflation in 2022 (by 0.2 p.p.) and an increase in the lower range in the coming years, which translates into higher inflation expectations (main forecast – so-called central path of inflation growth).

Source: RPP. Own compilation.

The annual GDP growth rate is projected, with a 50% probability, to fall within the range of 4.3% to 4.9% in 2022, -0.3% to 1.6% in 2023 (vs. July forecast of 0.2%–2.3%), and 1.0% to 3.1% in 2024 (vs. 1.0%–3.5%). The 2023 forecast assumes the expiration of most solutions concerning energy carrier taxation in 2022 (tax cuts under the Anti-Inflation Shield) and limited application of the Anti-Inflation Shield in 2023. The forecast also takes into consideration gas, heating and electricity tariff adjustments. The forecast indicates that all GDP components will report a decline, and the inventory change rate (inventory accumulation) – a slump. However, the positive impact of net export should increase. Gross fixed capital formation (investments) YoY should drop to approx. 0.0% at the beginning of 2023, while the potential product growth rate as estimated by the NBP should stand at approx. 3%. Therefore, the main forecast (or the so-called central path of inflation growth) shows GDP growth rate lower than the potential GDP growth rate, and a negative demand gap, which should lower the inflationary pressure.

Source: RPP. Own compilation.

4. Poland: Trade balance
According to the preliminary estimate released by the NBP, total imports in September 2022 amounted to PLN 144.8 bn (YoY + 33.8%), and exports to PLN 135.1 bn (YoY 30.3%), which means Poland’s trade balance recorded a deficit of PLN 9.7 bn. High annual growth rates predominantly result from high price rises. The service balance was positive (PLN 13.0 bn), but it did not offset the negative primary and secondary income balances. As a result, current account balance was negative and amounted to PLN -7.4 bn.

5. Eurozone: Trade balance
The first Eurostat estimate for eurozone exports of goods to the rest of the world in September 2022 was EUR 259.6 bn, an increase of 23.6% YoY. Imports from the rest of the world stood at EUR 294.0 bn, a rise of 44.5% YoY. As a result, the eurozone recorded a EUR 34.4 bn deficit in trade in goods with the rest of the world in September 2022 (versus a surplus of EUR 6.7 bn in September 2021). Intra-eurozone trade rose to EUR 247.6 bn in September 2022, up by 27.3% compared to September 2021. (EUR 194.5 bn).

6. Eurozone: GDP
According to the flash estimate released by Eurostat, seasonally adjusted GDP grew in Q3 2022 to 0.2% in the eurozone and in the European Union as a whole. The economy expanded by 2.1% in the eurozone and by 2.4% in the European Union as a whole.

Source: Eurostat. Own compilation.

7. USA: Producer prices (PPI) and production
After consumer prices rose less than expected, producer prices increased in October to 8.0% YoY (less than the 8.4% market consensus), while September data were revised downward by 0.1 p.p. Excluding food and energy, the core PPI stood at 6.7% YoY (less than the 7.2% market consensus). Compared to September, producer prices fell 0.1%, with the September data revised downwards from 0.4% to 0.1%. A decrease in production was accompanied by a decline in total capacity utilisation from 80.1% in September (revised from 80.3%) to 79.9%, contrary to an increase projected by analysts. However, looking at the overall U.S. economic activity, real GDP is expected to rise by 4.2% in Q4, as per the GDPNow model estimate for real GDP growth released by the Federal Reserve Bank of Atlanta. This means a significant improvement following the last estimate, i.e. an increase by 1.2 p.p. versus the estimate released on 19 October 2022.

8. China
China’s industrial production fell from 6.3% YoY in September to 5.0% YoY in October (versus the 5.3% market consensus), while retail sales declined by 0.5% YoY (versus the 0.7% market consensus).

 

This week:

  • Poland: PPI, industrial production, retail sales, unemployment rate, money supply
  • Eurozone: GDP (Germany), PPI
  • USA: Durable goods orders (initial)
  • Japan: CPI