Poland: Buoyant domestic demand pushes growth to six-year high in 2017
January 31, 2018
According to preliminary estimates released by the Central Statistical Office of Poland (GUS) on 30 January, GDP grew 4.6% in 2017. The result was above 2016’s weaker 2.9% expansion and represented the strongest reading since 2011.
An increased absorption of EU development and investment funds drove a rebound in fixed investment, which expanded 5.4% in 2017 (2016: -7.9%), boosting GDP growth. Moreover, private consumption growth accelerated to 4.8%, above 2016’s already robust 3.9% rise. Household spending was underpinned by a tightening labor market and robustly rising wages, together with low inflation and handouts to families from the government so-called ‘500+’ child benefit scheme. Overall, domestic demand rose 4.7% in 2017, marking a significant acceleration compared to the 2.2% increase recorded in 2016.
On the other hand, the external sector’s contribution to growth moderated, likely due to growing inflows of capital goods imports. As a result, the external sector made a positive 0.1 percentage points contribution to growth, down from the previous year’s 0.7 percentage-points contribution.
A flash estimate of Q4 2017 GDP data will be released on 14 February, and detailed data for 2017 GDP will be published on 15 May.
Poland GDP Forecast
FocusEconomics Consensus Forecast panelists expect that the economy will expand 3.8% in 2018, which is unchanged from last month’s forecast. For 2019, panelists foresee the economy growing 3.4%.