Poland Business Forecast Report Q4 2012

Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook

Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Ratings
Domestic Politics
Government Secure In Power Despite Scandals
We believe that the Civic Platform (PO)-led government is secure in power, in spite of several recent scandals and declining popularity
following the passage of unpopular pension reforms
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
A Maturing Regional Power
We consider Poland's long-term political risk profile to be on an upward trajectory, reflecting the country's maturing political institutions
and greater confidence in the conduct of external affairs

Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
Eurozone Crisis Weighs On Growth Into 2013
We maintain our below-consensus forecast for Polish real GDP growth of 2 5% in 2012 and have re vised down our forecast for 2013 to
2 6% from 2 9% as eurozone demand looks set to remain weak well into next year
TABLE: ECONOMIC ACTIVITY
Fiscal Policy
Deficit To Miss Target In Both 2012 And 2013
We maintain our forecast for Poland to narrow its budget deficit to 3 4% of GDP in 2012, from 5 1% the previous year, as the
government implements austerity measures However, we have revised down our 2013 forecast from 2 4% of GDP to 2 7% because of
a weaker growth outlook and increasing political pressures on the government
TABLE: FISCAL POLICY
Balance Of Payments
Robust Growth Potential Despite Eurozone Crisis
We have revised our forecast for Polish exports in 2012 and 2013 down to 3 3% and 7 0% respectively The long-term outlook for the
export sector is positive, with Poland gradually increasing its exposure to dynamic emerging Europe markets and moving up the value
added chain
TABLE: CURRENT ACCOUNT
Monetary Policy
Rate Hold In 2012 Despite Growth Slowdown
Although the possibility of a rate cut in late 2012 has increased in recent months, we maintain our forecast for the National Bank of
Poland (NBP) to hold its key policy rate at 4 75 % until earl 2013 This implies that investors are still too dovish, with the 2x5 FRA
anticipating a rate cut by early November, which we believe is highly unlikely
TABLE: MONETARY POLICY

Chapter 3: 10-Year Forecast
The Polish Economy To 2021
Long-Term Future Looks Bright
We forecast Polish real GDP growth to average 3 8% between 2013 and 2021, down slightly from 4 0% between 2001 and 2011
Poland is well placed to avoid the pitfalls of the middle income trap and continue benefitting from large catch-up growth with the rich EU
economies
TABLE: LONG-TERM MACROECONOMIC FORECASTS

Chapter 4: Business Environment
SWOT Analysis
BMI Business Environment Risk Ratings
Business Environment Outlook
Institutions
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
TABLE: BMI LEGAL FRAMEWORK RATING
Infrastructure
TABLE: LABOUR FORCE QUALITY
TABLE: EMERGING EUROPE – ANNUAL FDI INFLOWS
TABLE: TRADE AND INVESTMENT RATINGS
Market Orientation
TABLE: TOP EXPORT DESTINATIONS
Operational Risk

Chapter 5: Key Sectors
Pharmaceuticals
TABLE: GENERIC DRUG SALES, 2008-2016
TABLE: OTC MEDICINE SALES, 2008-2016
TABLE: OTC MEDICNE SALES BY SUBSECTOR, 2007-2010
TABLE: PRESCRIPTION DRUG SALES, 2008-2016
TABLE: PATENTED DRUG SALES, 2008-2016
Telecommunications
TABLE: FIXED LINE – HISTORICAL DATA AND FORECASTS, 2009-2016
TABLE: SECTOR – INTERNET – HISTORICAL DATA AND FORECASTS, 2009-2016
TABLE: SECTOR – MOBILE – HISTORICAL DATA AND FORECASTS, 2009-2016
Other Key Sectors
TABLE: INFRASTRUCTURE SECTOR KEY INDICATORS
TABLE: DEFENCE AND SECURITY SECTOR KEY INDICATORS
TABLE: FOOD AND DRINK SECTOR KEY INDICATORS
TABLE: OIL & GAS SECTOR KEY INDICATORS
TABLE: FREIGHT KEY INDICATORS

Chapter 6: BMI Global Assumptions
Global Outlook
Q412 Update
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES REAL GDP GROWTH FORECAST
TABLE: REAL GDP GROWTH CONSENSUS FORECASTS
TABLE: EMERGING MARKETS REAL GDP GROWTH FORECAST 45