Polish GDP expanded 1.7% year on year in the fourth quarter, after a gain of 0.3% y/y in the preceding three months (chart), seasonally adjusted data from the statistical office GUS showed in a preliminary reading on February 29.

Private consumption, the longtime driver of Polish economy, stagnated in Q4, as households rebuilt savings, weakened by the pandemic period, and in the wake of the gradual outflow of refugees from Ukraine. In effect, household consumption declined 0.1% y/y in the fourth quarter, following an expansion of 0.8% y/y in Q3.

Investment, on the other hand, held up well, growing 8.7% y/y, adding 1.5pp compared to the preceding quarter.

"We expect a continued economic revival in 2024, as GDP dynamics at the end of the year should increase to nearly 5% y/y,” PKO BP said. 

“The driving force of the recovery will be private consumption and investments, supported by the money from the EU’s pandemic recovery fund. Throughout 2024, we anticipate GDP growth of 3.7% compared to 0.2% in 2023,” PKO BP also said.

Overall, consumption managed an expansion of 1.5% y/y in Q4, after growing 1.3% y/y in the preceding three months, GUS data also showed.

Gross capital formation eased its decline to -11.7% y/y after falling 28.1% y/y in Q3.

On the back of stagnant household consumption but with gross capital formation easing the fall, domestic demand contracted 2.3% y/y in October-December, following a reduction of 5.2% y/y in the third quarter.

Net exports’ positive contribution eased to +3.3pp in Q4 from +5.9pp in the preceding three months.

In unadjusted terms, Poland’s GDP grew 1% y/y in Q4 versus a gain of 0.5% y/y in July-September, GUS data also showed.

Quarter on quarter, there was no change in the fourth quarter after a gain of 1.1% q/q in Q3.