Erste Group analysts have maintained the forecast of the growth of the Polish economy by 2.8% y/y in this year. Economists point out that the main driver of growth in the first months of the year was consumption, and investment activity will increase at the end of the year supported by funds from the European Union (EU).
“In conclusion, we maintain our forecast of annual economic growth at 2.8% in 2024, based on the sustainable impact of household spending and public spending as the main drivers of economic growth” it was announced in the commentary of Erste Group “Poland: Strong public sector expenditure pushes growth up in Q1” to the data of the Central Statistical Office on GDP in the first quarter of this year.
Erste Group forecasts that the trade balance sheet will remain stable in 2024, while the negative impact of stocks is likely to be further reduced.
“It is predicted that investment activity will be rescheduized in the second half of the year, and the main use of RRP will begin in 2025,” it said.
The Bank estimated that household consumption “showed strong growth” at the level of 4.6% y/y, contributing to economic expansion by 2.7 percentage points.
In the structure of GDP in Q1, the most significant decline was observed in stocks, along with a decrease in fixed-term investments in annual terms, Erste pointed out.
“Grosums of fixed assets recorded a decrease of 1.8% y/y, as remaining EU investment from the previous funding period took place already in 2023. While the inflow of funds from the next funding period is expected in the coming years, investment activity is expected to increase at the end of the year, supported by RRP funds.
According to the Central Statistical Office (GUS), Gross Domestic Product (unqualened seasonally, fixed prices of the average annual year of the previous year) increased by 2% y/y in Q1. 2024 vs. 0.4% decrease in y/y in the same quarter of 2023. This was influenced by the positive balance of foreign trade turnover and an increase in domestic demand by 1.7%. This resulted in a decrease in gross accumulation by 19.8% and a total consumption increase of 5.9% (compared to growth in Q4. 2023 by 2%). Consumption in the household sector increased by 4.6%. Gross fixed capital formation decreased by 1.8%.
According to the rapid estimate (published in mid-May), GDP growth in this approach in Q1 was 1.9%.
