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Poland GDP Q1 2021

Poland: Economy contracts at softer pace in Q1

According to a preliminary reading, GDP declined at a more moderate pace of 1.2% year-on-year in the first quarter, following the 2.7% contraction seen in Q4 2020.

While a detailed breakdown of the result is yet to be released, available data points to improving household spending in the quarter, despite the tightening of restrictions due to the pandemic. Retail sales expanded in Q1, while consumer sentiment turned less pessimistic. Moreover, business confidence improved in Q1, which likely supported investment activity. On the external front, growth in goods exports picked up pace compared to Q4 amid firmer foreign demand dynamics.

On a seasonally-adjusted quarter-on-quarter basis, the economy rebounded in Q1, growing 0.9% and contrasting the previous period’s 0.5% contraction.

More detailed data will be released on 31 May.

Commenting on the outlook for the Polish economy, Rafal Benecki, chief Poland economist at ING, reflected:

“We expect a further recovery in the months to come, reflecting pent-up demand, both domestically and abroad. […] In addition, we’re expecting another fiscal impulse in 2022 coming from EU Recovery Funds as well as the local budget. We see fiscal space in the Convergence Report for new expenditures, possibly a new social programme. […] We stick to our above consensus 2021 GDP forecast at 4.8% YoY and also see 5% YoY GDP in 2022.”

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