Poland’s GDP growth beats consensus with 5.3% y/y expansion in Q3

Poland’s GDP growth beats consensus with 5.3% y/y expansion in Q3
By Wojcich Kosc in Warsaw November 15, 2021

Polish GDP expanded a seasonally adjusted 5.3% y/y in the third quarter, easing after a jump of 10.9% y/y in the preceding three months, the Central Statistical Office (GUS) said in a flash estimate on November 12.

The flash reading comes above the consensus line of 4.8% y/y to affirm Poland’s economy is on track for a sustained recovery after the COVID-19 (coronavirus) induced recession that lasted 12 months from Q2 2020 to Q1 2021. 

The currently ongoing spike in new coronavirus cases appears unlikely to affect growth much due to a combination of the government’s lax response to the resurgent pandemic – it has ruled out any lockdown measures – and the vaccination of 52% of the population, low as that is.

Analysts attribute the recovery to Polish consumer spending, on services in particular, as well as strong performance by the industrial sector. The growth drivers will be spelled out in the second GDP reading, due at the end of the month.

“Based on available real economy data for the third quarter, we think that growth has been supported by strong industry and solid household spending, which likely focused on the services sector. Net exports likely remained a drag on growth, proving its counter-cyclical nature,” Erste said in a comment.

Growth in the third quarter means the economy expanded above the 5%-mark in 2021 overall – which will also be the peak of the current cycle.

“It would take a sharp slowdown in growth in the fourth quarter to prevent GDP in 2021 rising by 5%-5.3%,” Capital Economics said.

Next year, however, growth will ease to below 5% on the back of the economy running up against capacity constraints and with high inflation eliciting further monetary tightening.

External factors could also weigh down on growth in 2022, Erste notes. “Further delay of disbursement of funds from the EU Recovery Plan due to the ongoing dispute over the rule of law and judicial reform might weigh on investment activity,” the Austrian bank added.

In unadjusted terms, Poland’s GDP expanded 5.1% y/y in Q3 versus a jump of 11.2% y/y in April-June, GUS data also showed.

In quarterly terms, economic growth expanded an adjusted 2.1% in July-September after adding 1.9% q/q in the second quarter.

In 2020, Poland's GDP declined 2.7% in one of Europe’s mildest coronavirus-driven recessions.