Poland Economic Outlook
Poland’s economy started 2016 on a weak footing as in Q1 GDP expanded at the slowest pace in over two years. Fixed investment deteriorated notably on the back of reduced EU funds, public spending decelerated and the external sector weakened in Q1. Conversely, private consumption, which has been the backbone of Poland’s strong performance in recent quarters, remained solid. Data from April and May were more encouraging and point to a pickup in Q2. In April, industrial production and retail sales strengthened notably, while the unemployment rate continued to fall. Businesses remained confident and the PMI pointed to expansionary conditions in May. Meanwhile, Moody’s decision in May to cut the outlook on Poland’s A2 credit rating from stable to negative represents a setback for the economy. Moody’s main reasons for the cut were increasing fiscal risks due to a notable rise in expenditures and that the new Government’s shift to less predictable policies and legislation have led to a weaker investment climate.
Poland Economy Data
Poland’s economy started 2016 on a weak footing as in Q1 GDP expanded at the slowest pace in over two years. Fixed investment deteriorated notably on the back of reduced EU funds, public spending decelerated and the external sector weakened in Q1. Conversely, private consumption, which has been the backbone of Poland’s strong performance in recent quarters, remained solid. Data from April and May were more encouraging and point to a pickup in Q2. In April, industrial production and retail sales strengthened notably, while the unemployment rate continued to fall. Businesses remained confident and the PMI pointed to expansionary conditions in May. Meanwhile, Moody’s decision in May to cut the outlook on Poland’s A2 credit rating from stable to negative represents a setback for the economy. Moody’s main reasons for the cut were increasing fiscal risks due to a notable rise in expenditures and that the new Government’s shift to less predictable policies and legislation have led to a weaker investment climate.
Poland Economy Data
- 2011 2012 2013 2014 2015
- Population (million). 38.1 38.1 38.1 38.0 38.0
- GDP per capita (EUR) 9,987 10,233 10,372 - -
- GDP (EUR bn) 380 390 395 - -
- Economic Growth (GDP, annual variation in %) 5.0 1.7 1.2 - -
- Domestic Demand (annual variation in %) 4.2 -0.5 -0.7 - -
- Consumption (annual variation in %) 3.3 0.8 0.2 - -
- Investment (annual variation in %) 8.8 -1.8 -1.1 - -
- Industrial Production (annual variation in %) 6.8 1.4 2.4 - -
- Retail Sales (annual variation in %) 11.2 6.4 2.4 - -
- Unemployment Rate 12.5 13.4 13.4 - -
- Fiscal Balance (% of GDP) -4.9 -3.7 -4.0 - -
- Public Debt (% of GDP) 54.4 54.0 56.0 - -
- Money (annual variation in %) 11.5 4.2 6.7 - -
- Inflation Rate (CPI, annual variation in %, eop) 4.6 2.4 0.7 - -
- Inflation Rate (HICP, annual variation in %) 3.9 3.7 0.8 - -
- Inflation (PPI, annual variation in %) 8.4 -1.0 -0.9 - -
- Policy Interest Rate (%) 4.50 4.25 2.50 - -
- Stock Market (annual variation in %) -20.8 26.2 8.1 - -
- Exchange Rate (vs EUR) 4.47 4.08 4.15 - -
- Exchange Rate (vs EUR, aop) 4.12 4.18 4.20 - -
- Current Account (% of GDP) -5.2 -3.7 -1.3 - -
- Current Account Balance (EUR bn) -19.7 -14.4 -5.0 - -
- Trade Balance (EUR billion) -13.3 -8.1 -0.3 - -
- Exports (EUR billion) 132 141 149 - -
- Imports (EUR billion) 146 149 149 - -
- Exports (annual variation in %) 12.2 -1.6 9.2 - -
- Imports (annual variation in %) 13.5 -5.5 3.5 - -
- International Reserves (EUR) 75.7 82.6 77.1 - -
- External Debt (% of GDP) 61.3 73.7 73.3 - -
Poland Economic Growth
Poland’s economy is set for another fast expansion this year thanks to its solid economic fundamentals. However, uncertainties surrounding the new government’s policies represent a downside risk. Our panelists expect the economy to expand 3.6% in 2016, which is unchanged from last month’s forecast. For 2017, the panel sees economic growth broadly stable at 3.5%.
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