Poland's retail sales and unemployment data proved weaker than expected in June, pointing to a further deterioration of economic fundamentals and reinforcing market expectations that the central bank could soon consider cutting interest rates.
Retail sales rose 6.4 percent year-on-year last month, below the 8.95 percent forecast that was largely underpinned by hopes that Poland's co-hosting of the Euro soccer cup in June would boost consumption.
The largest central European economy expanded by an impressive 4.3 percent in 2011, one of the fastest rates in the European Union, showing strong resilience to the ongoing financial turmoil in the euro zone, Poland's key trading partner.
But after four years of a shaky global economy, Poland may now be slowly but surely losing steam, with its growth rate expected at 2.5-3.0 percent this year and much uncertainty as to the outlook for 2013 and beyond.
The zloty weakened 0.1 percent against the euro immediately after the date release, with bonds also reflecting a gloomier economic outlook. The two-year bond yields fell 2-3 basis points.
