Poland: Economic growth in the third quarter fastest in two years
November 30, 2010
In the third quarter, gross domestic product (GDP) expanded 4.2% over the same quarter last year. The result was up from the 3.5% growth recorded in the second quarter (previously reported: +3.8% year-on-year) and beat market expectations of a 3.3% expansion. In fact, economic output grew at fastest pace in two years. The robust growth was driven by upbeat consumers and the ongoing recovery in neighbouring Germany. Private consumption rose 3.5% over the same period last year, up from the 3.0% increase experienced in the second quarter. Gross fixed investment expanded only slightly at 0.4%, which is nevertheless an improvement on the 1.7% contraction recorded in the previous quarter. The higher investment figure can be attributed to new infrastructure projects co-financed by both the EU and Poland. Meanwhile, the net contribution from the external sector to overall growth improved compared to the second quarter. Exports accelerated only 9.6% in the third quarter (Q2: +14.7% year-on-year) and imports increased 9.5% (Q2: +16.2% yoy). As a result, the net contribution from the external sector to overall growth rose from minus 0.4 percentage points in the second quarter to zero in the third quarter. At the sector level, industry rose 10.2%, down from the 11.4% increase recorded in the second quarter, while services expanded 2.0%, up from the 0.8% increase registered in the previous quarter. A quarter-on-quarter analysis confirms the acceleration suggested by the annual figures, as the economy expanded 1.3% over the preceding quarter in seasonally adjusted terms (Q2: +1.2% qoq). The Central Bank sees economic growth averaging 3.5% this year and 4.3% in 2011.