As expected, GDP accelerated from 3.3% yoy in Q2 to 3.7% yoy in Q3. This is the fastest GDP growth in three years, although we had high hopes for an even better result (3.9% yoy). As usual, we can only speculate about the structure of GDP in the last quarter. However, it is safe to say that during this period, private consumption growth remained high (in our view, 4.5% yoy), while investment bounced back from a low base (2.5% yoy after a slight decline in the previous quarter). The available data did not indicate significant changes in the contributions of other categories.

Poland’s GDP (previous year’s constant prices, % yoy)

Source: GUS, Macrobond, Pekao Analizy

In the third quarter itself (seasonally adjusted), GDP grew by 0.8% qoq. This also means that the status quo was upheld in another sense. As we have pointed out several times in our commentaries on current GDP data, its level is currently significantly lower than what would be expected from a simple extension of long-term trends. The difference compared to the hypothetical path that the Polish economy would have followed, had there not been shocks in the past few years, now exceeds 5% and, given the moderate economic growth recorded in recent quarters, is systematically increasing. This has many consequences: the output gap is probably negative, which puts a constant brake on cost and price pressures; demand for labour is significantly lower than in previous years, resulting in a steady, albeit slight, decline in employment; there is considerable variation in the situation across sectors, which translates into weaker business sentiment. The current phase of expansion is already the slowest in this century (see chart below).

Comparison of recovery episodes (cumulative change in seasonally adjusted GDP from the trough)

Source: GUS, Macrobond, Pekao Analizy

What next? The biggest problem for the Polish economy at present is that flying solely on domestic engines is difficult – the current pace of growth, due to its import intensity, is close to what can be achieved based only on private consumption and investment. The persistent problem remains weak foreign demand and, consequently, exports. While in recent months we have seen some signs of improvement in this area, they are still tentative. As a result, although domestic demand still has room to pick up (2026 looks set to be very good for investment), further acceleration of the Polish economy will depend critically on the situation in Europe. Here, we expect faster growth, but due to structural reasons, the growth impulse there will not be rapid. Hence, we expect Polish economy to grow by 3.6% on average this year and by 4% in 2026.