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