Polish GDP showed no change y/y in the first quarter, (chart
) after adding 0.6% y/y in the preceding three months, seasonally adjusted data from the Central Statistical Office (GUS) showed in a flash estimate on May 16.
The flat growth line in Q1 is a positive surprise, pointing to the Polish economy apparently passing the worst of the downturn, analysts say.
The economy remains weakened still in the wake of the shocks brought about by Russia’s aggression on Ukraine. The tightening of monetary policy to fight inflation has affected consumption, while investment growth is slowing down amidst heightened geopolitical uncertainty.
But the scale of the downturn is smaller than expected. Adjusted quarterly growth showed a huge rebound of 3.9% in the first quarter which more than compensated for the fall of 2.3% q/q in October-December.
Unadjusted, GDP declined 0.2% y/y in Q1 after adding 2.3% y/y in the preceding three months. That is above the consensus line predicting a fall of 0.6% y/y.
Data suggest that private consumption deepened its decline below the -1.1% y/y recorded in Q1, PKO BP said in a comment.
On the other hand, “investments continued at least modest growth. [Also] positive contribution to GDP growth was probably made by net exports,” PKO BP said.
GDP data for the first quarter has analysts hinting that full-year growth might be somewhat more dynamic than expected.
“We return to our optimistic GDP forecast from the beginning of the year, assuming [growth of] 1% y/y,” ING said.
“Today’s data show that there is a slight upside risk to our economic growth forecast for 2023, which is 1.2% vs. 5.1% in 2022. We maintain our scenario in which the annual GDP growth will accelerate in the quarters to come, with particularly strong acceleration taking place in the second half of the year,” Jakub Borowski, Credit Agricole Bank Polska’s chief economist, said.
Analysts also agree that GDP Q1 data do not change the outlook for any change in the National Bank of Poland's (NBP's) monetary policy. The NBP is expected to keep its reference interest rate unchanged at 6.75% at least until the end of the year.