Poland: GDP decline moderates in Q1
May 31, 2021
According to a preliminary estimate, GDP shrank at a more moderate pace of 0.9% year-on-year in the first quarter, following the 2.7% contraction recorded in the fourth quarter of last year.
Household spending increased 0.2% in the first quarter, which contrasted the fourth quarter's 3.2% contraction. Meanwhile, fixed investment rebounded in Q1, growing 1.3% and contrasting the 15.4% contraction logged in the prior quarter. Less positively, government consumption growth softened to 2.5% (Q4 2020: +7.7% yoy).
On the external front, growth in exports of goods and services waned to 5.7% in Q1 (Q4 2020: +7.6% yoy). Conversely, growth in imports of goods and services sped up to 10.0% in the quarter (Q4 2020: +8.2% yoy), marking the best reading since Q4 2017.
On a seasonally-adjusted quarter-on-quarter basis, economic growth rebounded in Q1, with GDP increasing 1.1% and contrasting the previous quarter's 0.5% fall.
Commenting on the outlook for the Polish economy, Rafal Benecki and Dawid Pachucki, chief and senior Poland economists at ING, reflected:
“The GDP estimate released today confirms that the economy is increasingly resilient to the pandemic. We see upside risk for our 2021 GDP forecast at 4.8% YoY, which is already above consensus. The opening of the EU economies should sustain the high pace of exports and production, although disruptions in supply chains and limited access to components (including chips) may be a temporary constraint here. As the Polish economy opens up, services and trade will also recover and the pent-up demand effect should kick-off. Hence, we still see upside risks to GDP growth in 2021.”
Author: Hanna Andersson, Economist