Poland’s industrial production expanded 2.5% year on year at constant prices in March (chart), after a revised fall of 1.9% y/y the preceding month, unadjusted data from the statistical office GUS showed on April 22.

While a changeover from February, the expansion still came a negative surprise, as the consensus had pencilled in growth of 3.7% y/y in the third month. Poland’s industrial sector thus once again defied expectations of a wider recovery – as hinted at by recent PMI readings. 

The relatively high annual growth rate of industrial production in March is also due to the low reference base from March last year, analysts say.

In broader terms, “production outlook remains uncertain amid major shifts in U.S. trade policy. [While] the March PMI showed some improvement in new and export orders and production … this may have reflected U.S. stockpiling that boosts output in Europe and Poland,” ING also said. 

“The industrial sector still faces long-term risks from a trade war and supply chain disruptions,” ING also said.

Seasonally adjusted data show that output increased 3.8% y/y in March, following a gain of just 0.1% y/y the preceding month.

In unadjusted monthly terms, industrial production jumped 8.6% in March after a revised contraction of 0.3% month on month in February, GUS also said. Seasonally adjusted, output declined 0.7% m/m after falling 0.2% m/m the preceding month. 

Broken down by the main segments and in unadjusted terms, output increased 3% y/y in March in manufacturing following a revised fall of -2.1% y/y in February. 

Output in the utility sector retreated 1.1% y/y in March after a revised gain of 6.5% y/y the preceding month. 

In water supply and waste management, production picked up expansion to 1.8% y/y in March after adding a revised gain of 1.3% y/y in February.

Production declined 5.9% y/y in mining and quarrying in March, after falling a revised 12.6% y/y in February, GUS data also showed.

Overall, production expanded in 19 of 34 industrial segments in March in y/y terms, compared to 20 the preceding month.

The new data does not alter the outlook for monetary policy, analysts say. Expected economic recovery and still elevated wage pressures support the scenario of stable interest rates in the coming months.

The NBP cut its reference interest rate by a combined 100bp to 5.75% in September and October 2023. The central bank is expected to begin monetary easing in mid-2025 at the earliest.

GDP-wise, regardless of the final shape of new tariffs between the world’s largest economies, there is a high risk that heightened uncertainty over international trade conditions will negatively affect business and household sentiment. This will likely lead to reduced willingness to invest and consume. 

“Domestic demand will remain the key driver of Poland’s economic growth, but we have revised our 2025 GDP growth forecast from 3.5% to 3.2%. Risks to economic growth in 2026 are also increasing,” ING said.