Polish GDP expanded 1.3% year on year in the first quarter, (chart) easing slightly versus a gain of 1.6% y/y in the preceding three months, seasonally adjusted data from the Central Statistical Office (GUS) showed in a flash estimate on May 15.

The expansion points to economic recovery becoming sustained, even if not following a steady upward trajectory yet. 

“Economic growth in Poland is gradually recovering but low activity in the economies of Poland’s main trading partners, especially the ongoing recession in the German industry, limits the scale of the recovery,” Bank Millennium said.

Adjusted quarterly expansion came in at 0.4% following a fall of 0.1% quarter on quarter in October-December, GUS data also showed. 

Unadjusted, GDP growth picked up to 1.9% y/y in Q4 after an expansion of 1% y/y the preceding quarter. A detailed breakdown of GDP data will be published at the end of May.

Analysts say that the coming quarters should bring about better growth dynamics.

“This is a confirmation of the long-awaited scenario for gradual economic recovery in 2024, mainly driven by the acceleration of private consumption. We believe that this positive trend will continue, lifting GDP growth to 3% in 2024,” Santander Bank Polska said in a comment.

The GDP data for Q1 does not change much in monetary policy outlook.

“In the conditions of recovering economic growth, high core inflation, high wage dynamics, as well as low unemployment, the National Bak of Poland (NBP) will not rush to reduce interest rates,” Bank Millennium said.

The NBP’s reference interest rate has remained at 5.75% since October.