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Poland GDP Q4 2020

Poland: Second reading confirms steeper GDP decline in Q4

A second reading confirmed that GDP declined 2.8% year-on-year in the fourth quarter of 2020, worsening from the 1.5% contraction seen in the third quarter. On a seasonally-adjusted quarter-on-quarter basis, the economy slid 0.7% in Q4, contrasting the previous quarter’s 7.9% rise. Looking at 2020 overall, economic activity declined 2.7% (previously reported: -2.8%) after expanding 4.5% in 2019, marking the first contraction since 1991.

Q4’s annual downturn largely reflected the resurgence of Covid-19 cases and the subsequent reimposition of containment measures, and was driven by a decline in domestic activity. Private consumption fell 3.2% on an annual basis in the fourth quarter, which contrasted the third quarter’s 0.4% expansion. Moreover, fixed investment contracted at a steeper rate of 10.9% in Q4, following the 9.0% decrease logged in the previous quarter. Meanwhile, public consumption grew 3.4% in Q4, matching Q3’s result.

On the external front, exports of goods and services increased 8.0% year-on-year in the fourth quarter (Q3: +2.0% yoy). In addition, imports of goods and services bounced back, growing 7.9% in Q4, which contrasted Q3’s 1.0% decline.

Commenting on the outlook for the Polish economy, Rafal Benecki and Dawid Pachucki, chief and senior Poland economists at ING, reflected:

“We remain cautious about 1Q21 prospects. We are reiterating our forecast for a slight QoQ GDP contraction in this period. For the whole of 2021, we maintain our GDP growth forecast at 4.5% YoY, for now, although downside risks remain. In January, industry reported good results. Construction and retail sales fared worse. With the easing of trade restrictions in February, sentiment improved in retail and services. Industrial sentiment continues to look relatively good. But we are facing another wave of Covid-19 in Poland and we have to deal with the effects of prolonged restrictions in Europe.”

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