Poland: Growth jumps in Q3 on strong household spending and exports
November 30, 2017
Poland’s economy picked up pace in Q3, according to a second estimate released by the Statistical Institute on 30 November. GDP expanded a revised 4.9% in Q3 over the same period in 2016 (previously reported: +4.7% year-on-year), a notable acceleration from Q2’s 4.0% year-on-year rise. The acceleration in Q3 came on the back of a turnaround in the external sector, which benefited from healthy demand for Polish products from EU countries. Moreover, resilient household spending and an intensification of the recovery in investment after a weak first half of the year also drove the robust reading. In seasonally-adjusted quarter-on-quarter terms, GDP rose a revised 1.2% in Q3 (previously reported: +1.1% quarter-on-quarter), up from Q2’s 0.9% increase.
The domestic side of the economy continued to fare well in Q3. Private consumption rose solidly (Q3: +4.8% yoy; Q2: +4.9% yoy), underpinned by tightening labor market conditions, surging wages and low inflation. Growth in government consumption remained broadly stable in Q3, expanding 1.9% in annual terms (Q2: +2.1 % yoy). In addition, gross fixed investment gained considerable strength in Q3 (Q3: +3.3% yoy; Q2: +0.9% yoy). Absorption of EU-funded investments rose markedly following the timid recovery started in Q2, and favorable financing conditions also supported the uptick. That said, domestic demand expanded 3.9% in Q3, down significantly from the previous quarter’s 5.5% expansion due to unchanged inventories; inventories had risen markedly in Q2.
The external sector performed much better in Q3, with exports jumping 7.6% in annual terms compared to a much weaker 3.1% expansion in Q2. Imports, on the other hand, decelerated slightly from a 6.0% expansion in Q2 to 5.7% growth in Q3. As exports outpaced imports, the external sector’s net contribution to growth in Q3 was plus 1.1 percentage points, a turnaround from Q2’s minus 1.3 percentage-point contribution.