Warsaw, Feb 23 - Polish retail sales rose 16.5 percent year-on-year in January, much faster than expected, suggesting central Europe's biggest economy is accelerating on the back of both investment and consumption.
Statistics office data also showed unemployment rose to 15.1 percent in January from 14.9 percent in December, below forecast.
"This is another set of good data. It looks like positive trends in the Polish economy are even stronger than was thought," said Piotr Bujak, economist at Bank Zachodni WBK.
"Not only is there strong investment demand, as shown by output, but there is also strong consumption."
Industrial output data in January surged by more than 15 percent year-on-year, much faster than expected. At the same time, the government's budget showed a 3 billion zloty surplus in the first month of the year.
Finance Minister Zyta Gilowska said on Thursday the economy could expand by 7 percent in the first quarter of this year, up from her estimated 6.6 percent in the previous.
She also said there was a chance growth would be higher than 6 percent for the whole of 2007.
In 2006, Poland had its best growth for nine years, when the economy grew 5.8 percent on the back of booming investments, European Union funds, a strong export sector and rising consumer and mortgage credit.
The central bank is expected to hold the main interest rate at an all-time low of 4.0 percent next Wednesday but most analysts expect higher borrowing costs by the end of the year.
They remain divided over the timing of the first interest rate rise this year as the economy keeps accelerating but inflation pressures are yet to emerge.