Polish GDP growth slows down to 4.3% y/y in Q4

Polish GDP growth slows down to 4.3% y/y in Q4
By bne IntelliNews February 14, 2018

Polish GDP growth pushed to a seasonally adjusted 4.3% y/y in the fourth quarter, a flash estimate released by the Central Statistical Office GUS on February 14 showed.

The result sees growth lose some pace compared to the seasonally adjusted y/y expansion of 5.2% in the third quarter that came on the back of strong consumption and expanding – although still feeble - investment. 

However, GDP growth in the fourth quarter is expected to have occurred on the basis of a much more dynamic investment growth. While the detailed breakdown of the reading is scheduled for publication on February 28, it seems likely that investment will have joined private consumption as the leading growth driver. "We think that investment growth was driven by the government and local government sectors," Maria Jeznach, a director at GUS, told PAP.

Given that investment grew 5.4% in 2017, the pace of investment growth in the fourth quarter is to come in at a double-digit pace, Erste writes. 

The economy expanded 1% q/q in seasonally adjusted terms while growing 5.1% y/y in unadjusted terms. The 0.8pp difference between unadjusted and adjusted growth puzzled analysts.

“We are not able to explain exactly why there is such a huge difference between the seasonally adjusted and unadjusted growth. Especially that in the previous quarters, the difference was the other way round,” BZ WBK wondered.

Still, the overall picture of the economy remains positive with expectations for 2018 to deliver growth only slightly slower than last year.

“We expect to see solid economic growth around 4% [in 2018],” Erste noted. “Private consumption is likely to sustain the robust growth dynamics, while positive contribution of investment to GDP growth should increase this year,” the bank added.

Polish GDP growth shot up to 4.6% in 2017, the fastest expansion since 2011. In 2016, the economy grew only 2.9%.