Polish economy won’t suffer as much during second wave of COVID-19: report

Economists believe that the Polish economy is in a better position to ride out the second wave of coronavirus infections than it was in the second quarter of 2020. 

PKO BP polish bank experts point to a much better economic situation during the second wave (compared to the first wave) from analysis of data reports from Statistics Poland (GUS).

GUS announced that retail sales increased by 2.5 percent in September compared to September 2019. PKO BP’s analysts believe that a strong resurgence of car sales is a major factor behind this positive trend. Moreover, for the first time since March, the sale of food has also increased on a year-to-year basis.

The experts explained that the growth rate of sales of furniture and electronics has slowed down by just a small margin and remains the most rapidly growing category of products.

On average, in the third quarter of 2020, retail sales grew by two percent on a year-to-year basis compared to a drop of 10.6 percent in the second quarter of 2020.

The analysts also forecast that consumption will remain positive in the third quarter of 2020.

The second pandemic wave has prompted fears of a strong drop in consumption in the fourth quarter of 2020.

An analysis of card payments of PKO BP clients in October suggests that the scale of decrease of payments was marginal and expenses were six percent higher than directly before the pandemic, compared to eight percent in September 2020.

“These differences, in addition to current data, confirm in our view that the scale of the economy’s reaction (including consumption) towards the second wave of infections will be much smaller than what happened in the second quarter of 2020,” PKO BP economists pointed out.

Additionally, in September, the Polish construction sector has begun making up for previous losses. In fact, the growth in construction has seen double-digit increases in every category.

Economists believe that in the fourth quarter of 2020, the growth in construction should partially neutralize any potential weakening of activity in the service and trade sectors.

PKO BP analysts have increased their GDP dynamic forecast for the third quarterof 2020 from -1.9 percent year-to-year to -1.7 percent.

The prognosis for the total Polish GDP in 2020 remains the same at -2.9 percent.