Economic news

• ECONOMIC GROWTH: Economic growth accelerated from 3.5 to 3.8% yoy in Q2, according to the flash estimate published by GUS last week. We believe that there were two main drivers of this acceleration: investment and exports. GUS will publish these details in two weeks. A more detailed comment on the figure can be found in the next section.  
• INFLATION: CPI inflation accelerated to 3.0% yoy in July, Statistics Poland confirmed in its final release. Thus, our conclusions based on the flash data were spot on – Readers can find them here. In addition, the National Bank of Poland published official core inflation figures. Inflation excluding food and energy accelerated slightly in July, from 3.0 to 3.1% yoy.  
• BUDGET: The government decided to lower VAT on liquid fuels from 23 to 8% for the remaining part of the month but kept excise tax rates at normal levels. The price ceiling mechanism will also be reintroduced. Partial reinstatement of the CPN programme will cost roughly PLN 0.5 bn. The Minister of State Assets Wojciech Balczun said that another attempt to introduce windfall tax on refiners (and in addition on natural gas producers) will be made. The first was vetoed by the President.  
• DEBT: The Ministry of Finance conducted a switching auction last week. The MoF sold bonds worth PLN 10.7 bn and repurchased bonds worth PLN 10.2 bn.  
• BALANCE OF PAYMENTS: Current account deficit surged to EUR 2.2 bn in July, almost thrice the consensus (EUR 0.8 bn). The main source of the release, however, was the surprisingly big deficit on primary income balance (4.4 bn), consisting mainly of dividends paid to foreign owners of PLN corporations. The trade deficit rose a bit, from EUR 1.2 to 1.4 bn. Both exports and imports jumped in June, by 12.3 and 16.9% yoy.  

Oil shock failed to make a dent in the Polish economy 

GDP growth in the second quarter of 2026 accelerated from 3.5% to 3.8% yoy. This is paradoxical, as at the same time the global economy was hit by a supply shock in the form of significantly higher fuel prices. However, we are coping with this challenge relatively well. We are seeing an acceleration in investments financed by the National Reconstruction Plan (KPO) and an improvement in foreign trade. Consumers, meanwhile, likely tapped into their savings.

Real GDP (2015 = 100)

Source: Statistics Poland, Pekao Research

Last week’s reading came as no surprise to economists. The consensus forecast was exactly in line with the figure announced by the Central Statistical Office (GUS). Strong high-frequency data from recent months – primarily construction and industrial output – pointed to solid GDP growth, clearly indicating an acceleration in investment in our country. In short, the inflow of funds from the National Reconstruction Plan (KPO) has finally begun to show up in data on infrastructure construction: power grids, railways, and cultural, educational, and healthcare facilities. Commercial and residential construction look weak, but not weak enough to drag down the entire construction sector. Industry is also performing well – this is partly the same story as with construction (funds from the National Reconstruction Plan are stimulating, for example, orders for trains), and partly also the result of an improving economic climate abroad. Where does this improvement come from? Artificial intelligence. In Europe, there is also a need to expand data centers and integrate the components required for this.

Source: Statistics Poland, Pekao Research

Private consumption is a weaker aspect of the Polish economy, though we shouldn’t use strong language here. At most, we’re seeing a slowdown in consumption growth – and not even one that’s proportional to the slowdown in household income caused, on the one hand, by higher inflation and, on the other, by a slowdown in wage growth (we wrote about this, for example, here). Consumers have likely dipped into their savings, but this cannot last indefinitely, so a more pronounced slowdown in consumption can be expected in the second half of the year. Investment, however, will remain the engine of growth, so overall GDP growth will likely come in at a solid 3.5% yoy for all of 2026. We’ll find out in two weeks whether our assumptions regarding the situation in Q2 2026 are correct, when the second GDP reading and its breakdown are published.

Financial markets update

The domestic market hasn’t had a particularly successful week. Both the zloty and Polish government bonds lost ground. EUR/PLN bounced off support at 4.30 and is seeking a new equilibrium higher up. Meanwhile, the yield on the Polish 10-year bond approached 5.9%. We thought that strong GDP data would improve investor sentiment on Thursday, but that did not happen. In our view, this opportunity will not present itself again. Although macroeconomic data will continue to paint a positive picture of the Polish economy (labor market and industrial production on Thursday), the prospect of a negative rating revision by Fitch (on Friday) and a high deficit in next year’s draft budget (to be published before the end of August) will effectively dampen any investor optimism. Therefore, we expect the zloty to continue depreciating and POLGBs to be sold off.