Polish economy grows but doesn't accelerate
GDP growth in the second quarter amounted to 3.4% yoy – in line with the consensus forecast and only slightly faster than in the first quarter (3.2% yoy). The reading was somewhat weaker than our assumptions, especially when looking at the seasonally adjusted quarterly momentum: 0.8%. Even though this metric has lost some of its accuracy since the pandemic, it still paints a picture of a slow recovery of the Polish economy following the energy crisis.
This confirms the relatively moderate recovery in the Polish economy, supported by the continued growth of the services sector, alongside stagnation in industry and a decline in construction activity. Compared to other EU countries (including those in the region), our country continues to stand out positively. As usual, at this stage we do not yet know the breakdown of growth (this will be published in two weeks), but we can speculate a little about it.
Headline annual GDP growth in Poland
Source: StatOffice
We assume that the reported 3.4% yoy growth was driven by:
- continued solid investment growth (around 6% yoy), still largely concentrated in the public sector,
- an acceleration in private consumption to around 3% yoy (from 2.5% in the previous quarter),
- continued inventory rebuilding,
- a negative contribution from net exports.
GDP level in Poland after seasonal adjustment (2020 = 100) vs the longterm trend
Source: StatOffice, Pekao Research (trend part)
In the second half of the year, we expect the gradual acceleration of the economy to continue. However, following today’s reading (especially the weaker seasonally adjusted q/q growth), the risk to our full-year GDP forecast (4%) has increased. The shortfall in investment demand at the beginning of the year still needs to be made up, so we’re not giving up on that front yet. A bigger concern may be the potential escalation of trade tensions and the struggles of European exports, but in this case, we are mainly dealing with uncertainty and are waiting for greater clarity
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