Polish GDP expanded a seasonally adjusted 7.6% y/y in the fourth quarter, picking up from a gain of 5.5% y/y in the preceding three months, the Central Statistical Office (GUS) said in a preliminary reading on February 28.

Russia’s aggression on Ukraine has made the Q4 data largely historic with next to no bearing on how the Polish economy will fare in the first quarter and beyond.

“The macroeconomic scenario for Poland requires reformulation,” Bank Millennium wrote in a comment on GUS data. 

The war is likely to drive Polish inflation further up on the back of “sharp increases in the prices of energy commodities and possible disturbances in their availability”,  Bank Millennium also said. 

Inflation rising more than expected last week will eat into real wages and impede household consumption, the main driver of Poland’s economic growth.

The Polish economy will also suffer from the tanking economies of Russia, Belarus, and Ukraine. The collapse of exports to those three countries may shave at least 1pp off Polish growth in the coming quarters and, possibly, the entire 2022.

Household consumption and investment drove the expansion in the fourth quarter, the breakdown of the data showed. Household consumption grew 7.9% y/y in October-December, compared to an expansion of 3.7% y/y in the preceding three months. Investment increased 11.7% y/y after growing 9.3% y/y in Q3.

In unadjusted terms, Poland’s GDP expanded 7.3% y/y in Q4 versus a gain of 5.3% y/y in July-September, GUS data also showed. Quarter-on-quarter, the economy added 1.7% after a gain of 2.3% q/q in the second quarter.

Last year, Poland's GDP grew 5.7% after declining 2.7% in 2020 in the wake of the pandemic.