Industrial output declined 5.0% m/m or 1.4% y/y in January. Working day adjusted, the industry was up 3.1% y/y. The fig-ures are in line with market expectations and are neutral for the market. The only sector that posted and increase were utilities that were up 8.4 y/y. The key manufacturing prolonged its decline by 2.7% y/y, after a slump by 7.6% in December. This, along with subdued industrial prices does not bring any hope for near term revival in the industry. PPI in manufacturing was up 0.1% m/m but declined 1.9% in year-on-year terms, after -2.6% in December. MPC’s D.Rosati said that “The industrial production figures ... do not confirm some hopes for an eco-nomic recovery in January. But they are not bearish either and do not indicate a further slump in production. We had some signals that the first signs of recovery could have been seen already last month, but these numbers do not confirm such expectations.” We maintain our expectations that the MPC will cut rates by 100 bps in March.
Konrad Soszynski, Kredyt Bank S.A., Warsaw
Jakub Dvorak