Poland GDP Q2 2019


Poland: Growth eases but remains upbeat in Q2 on buoyant domestic demand

August 30, 2019

Poland’s economy grew 4.5% year-on-year in unadjusted terms in the second quarter of this year, according to a revised estimate released by Poland’s Statistical Institute (GUS) on 30 August. The second-quarter outturn surpassed both analysts’ expectations and the preliminary estimate which projected a 4.4% annual expansion, although it was slightly down from Q1’s 4.7% increase nonetheless. On a quarter-on-quarter basis, growth decelerated to 0.8% in seasonally-adjusted terms (Q1: +1.4% quarter-on-quarter seasonally-adjusted).

Unadjusted year-on-year figures show domestic demand strengthened in the quarter. Particularly, household spending was upbeat (Q2: +4.4% year-on-year; Q1: +3.9% yoy), supported by strong wage growth and a tight labor market. Moreover, although government spending moderated markedly (Q2: +3.4% yoy; Q1: +6.4% yoy), it remained reasonably robust nonetheless in the run-up to October’s parliamentary elections. Fixed investment, meanwhile, continued to surge and expanded 9.0% (Q1: +12.6% yoy), lifted by low interest rates, supportive credit growth and the strong absorption of EU-linked structural funds. Lastly, destocking subtracted 0.1 percentage points from growth, much less severely than Q1’s 1.1 percentage-point subtraction.

On the external front, net exports’ contribution to growth was null in Q2, down from Q1’s 0.7 percentage-point contribution. Export growth moderated (Q2: +3.9% yoy; Q1: +5.9% yoy) owing to increased weakness across the Eurozone. Import growth, meanwhile, also decelerated, albeit to a lesser extent (Q2: +4.3% yoy; Q1: +5.0% yoy).

Economic activity will likely soften this year amid a less supportive external environment and a diminished contribution to growth from EU-driven fixed investment, and as the economy approaches the tail-end of the current business cycle. Nevertheless, sizable wage and job gains should sustain consumer spending and GDP, while the government’s fiscal measures, which are set to come into effect in H2, represent a key upside risk to growth. FocusEconomics Consensus Forecast analysts expect growth of 4.2% in 2019, which is up unchanged from last month’s forecast, and 3.6% in 2020.

Author: Massimo Bassetti, Economist

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Poland GDP Chart

Poland GDP Q2  2019 2

Note: Year-on-year changes of GDP in %.
Source: Central Statistical Office (GUS) and FocusEconomics Consensus Forecast.

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