Gross domestic product (GDP) in Poland, unadjusted for seasonal variations, increased by 2% year-on-year in Q1 2024, compared to a decline of 0.4% in the same quarter last year, according to the Central Statistical Office (GUS).
GUS revises GDP growth rates provided in quick estimates. A larger dataset allowed for an adjustment of the growth rate from 1.9% to 2% year-on-year. GUS also revised the data for Q4 2023, resulting in a 0.1 percentage point higher quarter-on-quarter growth than indicated in the quick estimate (0.4% q/q).
Our optimistic scenario that funds from the National Recovery Plan (KPO) would prevent a decline in investments has not materialized. In the first quarter, investments decreased by 1.8%. The most significant drag on economic growth was the reduction in inventories. The total gross accumulation component fell by 19.8% year-on-year. This is due to a shaky industrial sector (value added in Q1 was only 0.2%) and a lack of new orders. Construction also underperformed, providing little hope for results above 0% in the first quarter.
However, as predicted in our quick GDP estimate, consumption, along with a positive trade balance, drove economic growth. Consumption increased by nearly 6% year-on-year, giving hope for further acceleration in the coming quarters, thanks to rising real wages and a relatively stable labor market.
The larger dataset and their revisions strengthen our baseline scenario for GDP growth in the entire 2024 to around 2.5%.
Mariusz Zielonka, Lewiatan Confederation
