Polish GDP growth was confirmed at was confirmed at a seasonally unadjusted 2.7% in the fourth quarter of 2016, the country's statistics office reported in a second estimate on February 28. The reading also confirms economic expansion at 2.8% across the full year.

The data, which adds details to the earlier releases, shows that consumption remained largely alone as the driver of the Q4 expansion. The growth in the final three months of the year was 0.2pp higher than that in the third quarter, and better than expectations, but the result still leaves growth across the year well below the government's original hopes of 3.8%.

The details offered in the GUS release confirm suspiscion that growth rested on consumption as virtually its only pillar. Investment continued to fall in the fourth quarter. That said, there is a general consensus that a faster uptake of EU funds in the coming quarters should help stop the rot.

The recovery of investment is key for the government's forecast of a 3.4% expansion this year. If that is not the case, slower economic growth could translate into lower income from taxes and problems in meeting the assumed deficit target. The government insists the budget gap will not exceed 3% of GDP, despite inflated expenditure.

In adjusted terms at constant prices, the economy expanded 3.1% y/y in October-December, and 1.7% on a quarterly basis. That is faster than the 2.3% annual expansion and 0.4% q/q in the previous quarter.

Household consumption expanded 4.2% y/y, against 3.9% in the previous quarter. Investment fell 5.8% in October-December, the fourth consecutive quarter of decline, although the drop was at a slower pace than 7.7% recorded in the third quarter.

Growth in 2017 should accelerate to 3%, according to Erste, supported by private consumption and recovering investment. Risks are mainly to the upside, Erste also notes.

“We expect more pronounced acceleration in the second half of the 2017 that should push economic growth visibly above 3%. Moreover, if the external environment keeps improving, we see the risks to the upside to our current call of 3.0%,” the analysts claim.

BZ WBK is more cautious. The bank suggests growth will still be largely dependent on private consumption, and while the economy is set to pick up speed in 2017, the pace will remain moderate.