Polish GDP growth pushed to a seasonally-adjusted 5% y/y in the third quarter, a flash estimate released by the Central Statistical Office GUS on November 14 showed.
The result sees growth accelerate upon already robust growth rates recorded for the first and second quarters, when GDP grew a revised 4.4% y/y and 4.2% y/y, respectively. That is in line with strong economic expansion across Central and Eastern Europe as the region benefits from strong private demand, recovering investment, and robust activity in the Eurozone, the source of the majority of export demand.
The economy expanded 1.1% q/q in seasonally adjusted terms while growing 4.7% y/y in unadjusted terms.
The flash release did not include a breakdown of contributing elements to the growth, but it seems likely that private consumption remains the leading driver, as the tight labour market and fiscal transfers continue to encourage household spending.
“Moreover, further acceleration in the construction output growth suggests that investment activity should finally pick up in the third quarter. Trade surplus since the beginning of the year suggests that net exports have had a positive contribution to growth as well,” Erste wrote.
The contribution of net exports is in line with the high dynamics of German GDP, state-owned bank BGK observed.
The GDP growth in the third quarter is in line with the projection of the National Bank of Poland (NBP), and is therefore unlikely to affect monetary policy, which guides for the benchmark interest rate to remain at 1.5% until at least the second half of 2018.
NBP projects GDP to expand 3.8%-4.6% in 2017 overall. Growth is forecast at 2.8%-4.5% in 2018 and 2.3%-4.3% in 2019.
“No matter whether the final 2017 GDP growth lands at 4.1% or 4.3%, this will the highest growth since 2011 when economy expanded 5.0%,” Erste noted. The 4.1%-4.3% range of growth in 2017 seems to be the dominant expectation by analysts at other banks as well.
“Next year, further acceleration of investment activity will be crucial for sustaining robust GDP growth as growth of consumption is likely to slow down,” the bank added.