Polish GDP growth surged 4% year on year in the first quarter, picking up sharply versus a revised gain of 1.8% y/y in the preceding three months, seasonally adjusted data from the Central Statistical Office (GUS) showed in a flash estimate on August 14.

The data appear to show that the Polish economy has now embarked on a path of steady growth in 2024, “driven by private and public consumption fuelled by exceptionally rapid wage growth”,  Santander Bank Polska said in a comment. Details of the GDP structure will be published at the end of August.

Adjusted quarterly expansion came in at 1.5% in the second quarter, following a revised gain of 0.8% quarter on quarter in January-March, GUS data also showed. 

Unadjusted, GDP growth picked up to 3.2% y/y in Q2 after an expansion of 2% y/y the preceding quarter.

Some analysts are now positive that the coming quarters should bring about better growth dynamics.

“Following today's data, we remain confident in our forecast of 3.5% GDP growth for 2024, up from 0.2% in 2023,” PKO BP said in a comment.

“We expect the second half of the year to outperform the first, with growth continuing to accelerate steadily [driven] by consumption and investments. The current weakness in investment is significantly less pronounced than in previous EU budget transition periods,” PKO BP also said.

But that sentiment is not universal. 

“There are some signs that the economy may have lost momentum in early Q3,” Capital Economics said.

“The [economic sentiment] dropped in July and it looks like Poland’s main trading partners in the Eurozone made a weak start to the quarter. Still, with the labour market and wage growth strong, we expect reasonably solid growth outturns over the second half of the year,” Capital Economics also said.

The GDP data for Q2 does not change much in the monetary policy outlook.

“Sustained solid economic growth and the prospect of further inflation increases reinforce the National Bank of Poland’s [NBP’s] hawkish stance,” Bank Millennium said.

The NBP’s reference interest rate has remained at 5.75% since October. With inflation expected to begin easing only in 2025 sometime, the NBP will possibly start a new round of monetary easing in the second quarter of that year.