WARSAW. MAY 24. INTERFAX C.NTRAL EUROPE - Poland's economy is expected to continue its solid expansion, driven by private consumption and investment, the Organization for Economic Cooperation and Development (OECD) said in a preliminary outlook report Thursday, reiterating its forecast of monetary tightening this year.
"Productivity gains have offset wage increases until now, but inflation has nevertheless ticked up recently," the OECD experts wrote in the report. "Strong domestic demand, falling unemployment and accelerating unit labour costs suggest that monetary policy should be tightened in 2007. The fiscal outcome expected for 2007 is improving, mainly because of a cyclical increase in revenues."
The organization expects private consumption to rise 5.0% this year and next, just short of the 5.1% rate notched up in 2006.
Investment will rise 14.8% this year, slowing to 10.0% in 2008. Last year, the figure stood at 16.5%.
Domestic demand is expected to rise 6.3% in 2007 and 5.6% in 2008, after last year's 6.6% gain.
Net exports will continue to make a negative contribution to growth, at 0.5% this year and 0.1% in 2008, after 0.2% in 2006.