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Poland GDP Q4 2023

Poland: Annual GDP growth accelerates in Q4

Economic growth sped up in the fourth quarter, with GDP increasing 1.0% on an annual basis (Q3: +0.5% year on year). Q4’s reading marked the best result since Q3 2022. On a seasonally adjusted quarter-on-quarter basis, the economy stagnated, following the 1.1% rise recorded in the previous quarter.

Household spending weakened, dipping 0.1% yoy in the fourth quarter, which contrasted Q3’s 0.8% expansion. Meanwhile, government spending growth accelerated to 5.7% in Q4 (Q3: +3.3% yoy). Fixed investment growth accelerated to 8.7% in Q4 from 7.2% in Q3. On the external front, exports of goods and services rebounded, expanding 2.7% in Q4 (Q3: -11.0% yoy). Meanwhile, imports of goods and services declined at a softer pace of 2.8% in Q4 (Q3: -20.3% yoy).

The pace of economic growth will speed up significantly this year from 2023. Private consumption will benefit from lower inflation and interest rates, as well as rising real wages, while recovering external and domestic demand should prop up industrial activity. The faster-than-expected disbursement of EU funds poses an upside risk, while additional spillovers from the Russia-Ukraine war pose a downside risk.

Commenting on the outlook, ING’s Rafal Benecki and Adam Antoniak stated:

“We remain optimistic about economic growth in 2024, and project a rebound to 3%. This is supported by a dynamic increase in real disposable income associated with lower inflation, a rise in nominal wages (a large hike in the minimum wage, and a 20-30% rise in public administration), as well as an increase in social benefits. […] The main risk to the economic outlook is underperformance of German economy, which, combined with the strong PLN and stronger price competition from Asian manufacturers, may translate into a deterioration of the foreign trade balance.”

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