By Adrian Krajewski and Karolina Slowikowska
WARSAW, Nov 30 (Reuters) - Poland's economic growth was the lowest in three years in the September quarter, fuelling expectations of more rate cuts to revive what had been one of Europe's most resilient economies.
A slowdown in the region's biggest emerging economy will be felt by its neighbours, including Germany, which is finally feeling the pinch itself from the economic crisis.
Polish gross domestic product growth in the quarter, at 1.4 percent, was below analysts' forecasts of 1.8 percent, and weaker than the second quarter figure of 2.3 percent, Friday's official data showed.
The last time quarterly GDP was this low was in the second quarter of 2009, and the figures could further harm confidence among Polish households and businesses.
Prime Minister Donald Tusk tried to calm nerves, saying GDP will stabilise in the fourth quarter. Officials and most economists say a recession is unlikely.
But t he finance ministry's chief economist, reacting to the data, said GDP for the whole year would slightly u ndershoot the ministry's 2.5 percent target, and that 2013 growth co u ld also be below forecast.
The numbers strengthen the likelihood that the central bank will cut the key interest rate next week. All analysts expect a cut of at least 25 basis points, but the sharp decline in GDP growth will create pressure for more and deeper cuts.
'The data is bad,' Elzbieta Chojna-Duch, a dovish member of the central bank's Monetary Policy Council, told Reuters.
'I expect the fourth quarter to be even weaker but I do not believe that growth will fall below 1 percent. I think 1 percent is the barrier.'
She said the data reinforced the need for an interest rate cut, the second in two months, when the council meets next week.
'But I do not think that panic is the right response,' Chojna-Duch said. 'Things are tough, we can see this in the corporate sector, but we need to look at the economy from a longer-term perspective.'
Data released on Friday also showed that investments and domestic demand shrank year-on-year in the July-September period. Net exports remain currently the only meaningful engine of growth.
Poland's zloty currency fell 0.3 percent on the data.
Poland has been a rare bright spot in Europe's gloomy economic landscape. It was the only EU country to escape recession after the global banking crisis broke out four years ago.
Its growth was sustained by strong consumer spending, and a massive programme of infrastructure building for the Euro 2012 soccer tournament. That is no longer there to insulate Poland from the effects of the recession in the euro zone.
Polish growth is still the fifth highest in Europe, even after Friday's data. But after two decades of expansion, the slowdown is painful for Poland and for countries like neighbouring Germany whose exports it buys.
So far Poland has not had to adopt the kind of strict austerity measures seen in some of its neighbours, but with tax revenues falling, officials may have to tighten their spending plans. That in turn could worsen the slowdown.
Finance Minister Jacek Rostowski, speaking at a conference in Paris, said there was no need yet to revise the draft budget for 2013, but 'if things turn out differently we will be prepared to take corrective action'.
E mployers' lobby Lewiatan said there was a risk the economy could shrink in the first quarter of 2013, the first quarterly year-o n -y e ar contraction in over 15 years.
(Additional reporting by Marcin Goeetig, Dagmara Leszkowicz and Pawel Sobczak in Warsaw and Leigh Thomas in Paris; Writing by Christian Lowe; Editing by Stephen Nisbet) Keywords: POLAND GDP/
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