Polish recovery accelerates as domestic drivers take lead
June 2, 2014
Poland’s Q1 GDP readings "confirm continued economic recovery in 2014 as previously signaled in labor market, industrial output, retail sales and consumer sentiment statistics," deputy Finance Minister Artur Radziwill said of the data from the Central Statistics Office (GUS).
"The high rate of export growth continues, but at the same time, the share of domestic demand in growth, and importantly investments, is rising," he said. "Poland remains one of the fastest growing EU economies."
Poland's economic recovery accelerated in the first quarter of the year, showing strong growth in domestic drivers that are increasingly taking the burden from the exports that had been the economy's sole engine less than one year ago.
Annual GDP growth rose to a rate of 3.4% in the first quarter on seasonally adjusted quarterly growth of 1.1%. The reading proved well above the prior quarter's annual growth rate of 2.7% and even a notch above the flash reading of 3.3% issued two weeks ago.
Poland built its 3.4% annual GDP growth in Q1 on nearly exclusively domestic elements, with a 10.7% annual increase in investments allowing investments to account for a full 1.2 pps of the headline growth rate, a Q1 GDP report by the Central Statistics Office (GUS) showed.
Of the 3.4% GDP growth rate, total domestic demand accounted for a full 2.9 ppts, leaving net exports, which just three quarters ago remained the economy's only engine, to pick up only 0.5 pps of the headline figure.
Consumption, where the annual growth rate slipped from the Q4 level as public consumption slowed but the private consumers showed verve, still constituted the larger contribution at 1.8 pps of the headline figure.
The shape of Q1 growth took also broad praise from local analysts who like the healthy look of the recovery.
"Once again we may say that the base for growth is wider, which means that the recovery will be more durable," ING Bank Slaski economist Grzegorz Ogonek told PAP Polish news agency.
"We are diverging from the situation in the euro zone, where such conclusions may not yet be drawn after Q1 2014 data," Ogonek said.
“While only three quarters ago Poland was showing an investment recession now investments account for 1.2 pps of the 3.4% growth rate, whereas consumption constituted the larger contribution at 1.8 pps of the headline figure,” he said.