Poland’s GDP grew 5.1% in 2018, the fastest expansion since 2007, a preliminary estimate from the country's statistical office GUS showed on January 31. The breakdown of the data also suggests economic growth eased in the fourth quarter y/y, a harbinger of a clear slowdown in expansion in 2019.
The full year result beats the revised 4.8% growth recorded in 2017 and arrives on the back of healthy household consumption – an effect of a very tight labour market - and a recovery in investment, analysts note. Household consumption grew 4.5% in 2018 while investment expanded 7.3%, the fastest since 2014.
Growth of household consumption slowed down last year compared to an expansion of 4.9% in 2016, however. Contribution of exports was neutral or limited at best, according to analysts.
“It appears that there was a sharp slowdown in total investment growth at the end of last year. As fixed investment growth looks to have held up fairly well, it seems that inventories exerted a big drag. The inventory cycle – which has provided a big boost to GDP growth in recent years – is starting to turn,” Capital Economics wrote in a comment to the figures.
“This is a key reason why we expect the Polish economy to slow this year. We’re forecasting GDP growth of 3.5% over 2019 as a whole,” Capital Economics added.
The slowdown in growth of household consumption and little to no support from exports also point to GDP growth easing in the fourth quarter. Analysts estimate the economy expanded 4.9% y/y in October-December, compared to growth of 5.1% y/y in the third quarter
(unadjusted data). More detailed data on GDP in the fourth quarter are due later this month.