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UPDATE 2-Polish April sales, jobless better than forecast

Published 05/26/2009, 10:47 AM
Updated 05/26/2009, 11:00 AM
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(Adds PM Tusk comment, paragraphs 4-6)

By Karolina Slowikowska and Gabriela Baczynska

WARSAW, May 26 (Reuters) - Poland's retail sales rose and unemployment fell in April, underlining the relative resilience of the EU's largest ex-communist economy in a global slowdown that has hit many of its neighbours much harder.

Statistics office data showed retail sales rose 1.0 percent year-on-year in April after posting a decline of 0.8 percent in the previous month, while analysts had forecast a rise of just 0.1 percent.

At the same time, data showed the unemployment rate unexpectedly fell to 11.0 percent, below forecast and less than the 11.2 percent posted in the previous month.

Prime Minister Donald Tusk welcomed the data as a relief.

"The retail sales growth, though only of 1 percent, is a positive signal when it comes to Poland's economy, a calming signal in today's reality in Europe," Tusk told a news conference after a weekly cabinet meeting.

Tusk said the data confirmed earlier estimates that economic growth in the first quarter was slightly above zero. The statistics office is due to release official data on first quarter economic growth on Friday.

Analysts said seasonal factors trimmed the jobless figure.

"When it comes to the unemployment rate, there has been a seasonal easing due to seasonal work in the construction and agriculture sectors," said Arkadiusz Krzesniak, chief economist at Deutsche Bank in Warsaw.

"This data shows that the economic situation in Poland will not change significantly over coming months. We will likely see a continuation of trends that appeared in the first quarter -- that is, weak retail sales but without any drastic breakdown and a slowly rising unemployment rate."

As a comparison, recession-bound Hungary's retail sales fell 3.6 percent in March.

GROWTH

A median forecast of analysts in the last Reuters poll puts first-quarter growth in Poland at 1.0 percent, down from 2.9 percent in the previous quarter and 4.9 percent for the whole of 2008.

The median growth forecast for 2009 is 0.5 percent, though a growing number of analysts, following the International Monetary Fund and the European Commission, now expect some contraction in Poland's economy this year.

"It still seems likely there will be an economic contraction in the whole of the year but (today's data) shows Poland is performing better than the rest of the region," said Timothy Ash, head of emerging European Research at RBS.

Bonds were unchanged after the data and the zloty was weaker. However, dealers linked the decline in the Polish currency to news that German GDP had posted a record quarterly drop in the first three months of the year and to a fall in Asian stocks amid rising tensions over North Korea's nuclear test.

Analysts expect the central bank to keep interest rates unchanged on Wednesday for the second month running because the weak zloty continues to fuel inflationary pressures against the background of the slowing economy. (Additional reporting by Adrian Krajewski; Writing by Karolina Slowikowska; Editing by Stephen Nisbet)

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