Poland: Buoyant domestic demand lifts GDP growth in Q1
May 30, 2018
Poland’s economy sailed through the first quarter, according to comprehensive data released by the Statistical Office on 30 May. Ticking up 0.1 percentage points from the flash estimate released two weeks earlier, the economy grew 5.2% over the same period last year (Q4 2017: +4.9% year-on-year), one of the strongest readings of the past decade. Faster growth was the result of buoyant domestic demand, which more than offset a sharp slowdown in the external sector.
Domestically, the economy fired on all cylinders. Growth in household spending remained elevated (Q1: +4.8% yoy; Q4 2017: +5.0% yoy), bolstered by stronger employment and wage growth in the quarter—which kept consumer sentiment riding high in recent months. Moreover, the further recovery of fixed investment (Q1: +8.1% yoy; Q4 2017: +5.4% yoy) was supported by the increased absorption of EU-linked funding and high capacity utilization rates. Notably, inventories jumped in the quarter, contributing 1.9 percentage points to the headline reading. Meanwhile, growth in government spending moderated somewhat but remained upbeat (Q1: +3.6% yoy; Q4 2017: +4.8% yoy).
Export growth, however, eased sharply (Q1: +1.1% yoy; Q4 2017: +8.2% yoy) on broadly weaker trade dynamics across the EU. Import growth also slowed in the quarter (Q1: +3.5% yoy; Q4 2017: +8.9% yoy). Taken together, the external sector subtracted 1.2 percentage points from headline growth—outpacing the 0.8-percentage point subtraction recorded in the fourth quarter last year.
On a quarter-on-quarter basis, the economy grew a stellar 1.6% in seasonally-adjusted terms, well ahead of the 1.0% expansion recorded a quarter earlier.
Author: Christopher Thomas, Economist