The Polish economy is poised for a rebound after a challenging 2023, claim economists at the Polish Economic Institute (PIE) after the latest data from the Central Statistical Office (GUS). They predict that in the upcoming quarters, Poland will experience growth rates exceeding 2 percent, fueled largely by increased household consumer spending.
In a preliminary estimate released by the GUS on Thursday, Poland’s gross domestic product (GDP) in the fourth quarter saw a year-over-year increase of 1.0 percent, a slight improvement from the 0.5 percent growth observed in the third quarter of 2023. This figure aligns with the earlier “flash estimate” provided by the GUS.
The PIE analysts highlighted that this outcome was influenced by weak household consumption and robust corporate investment expenditures, which grew by 8.7 percent year-over-year. Additionally, net exports contributed positively, whereas a decline in inventories had a negative impact. The analysts noted that “significant drops in inventory levels are likely related to data compilation issues and often undergo revisions in subsequent publications.”
For the first quarter of 2024, the growth rate is expected to be around 2.2 percent, aided by a rebound in consumer spending and a low base from the previous year.
The analysts also observed a noticeable slowdown in investments due to a standstill in local government work on projects funded by EU cohesion funds, a phenomenon that typically occurs at the beginning of a new seven-year budget.
Moreover, they anticipate a slower pace of investment among firms due to reduced operational profits.
The PIE forecasts that the Polish economy will close 2024 with a growth rate of approximately 2.4 percent, with the second quarter expected to show the strongest performance, nearing 3 percent year-over-year growth. However, the latter half of the year might see weaker results due to modest increases in investment spending. Financial support tied to incoming EU funds is likely to become evident only in the final quarter in terms of GDP data.
