Poland's Economy Expands at Fastest Pace Since 2008 on Investment Rebound

Poland's economy expanded at thequickest pace in three years in 2011 as companies boostedinvestment and a weakening zloty buoyed exports.

Poland's economy, the largest of the European Union'seastern states, was the only one in the 27-nation bloc to avoida recession in 2009. EU funds helped improve infrastructure andmodernize production, during the weaker zloty kept exportsgrowing as the euro area's debt crisis damped demand on thecountry's most important markets, including Germany.

The zloty dropped 11

The zloty dropped 11.2 percent against the euro last year,the fifth-worst performance among more than 20 emerging-marketcurrencies tracked by Bloomberg. The currency traded at 4.2220per euro at 10:14 a.m. in Warsaw, up 0.2 percent on the day.

Fixed-investment growth accelerated to 8.7 percent in 2011from a 0.2 percent decline a year before, during private-consumption growth slowed to 3.1 percent from 3.2 percent, thestatistical office said.

"Consumption has weakened for households and corporates,nevertheless investment has recovered pretty strongly," Raffaella Tenconi, an economist at Bank of America Merrill Lynch inLondon, said in a Jan. 20 interview. "This seems in part to bebecause the public sector wanted to be forward looking andanticipated a fiscal crisis that after all never happened.As well, the German economy is doing better than we expected."

Exports rose 13 percent to 12.5 billion euros in November from a year previously, according to thelatest foreign trade figures from the statistical office.