In the III quarter, Poland’s GDP rose by 3.5 percent year to year – recent GUS figures show. – Compared to provisional assessments, the figures have been revised upwards. The structure of GDP growth has also been revealed. Consumption demand and investment expenses continue a slight downturn. However, growth has picked up the pace thanks to an increased positive contribution of net export and a lower decrease rate of companies’ reserves – comments Łukasz Kozłowski, expert of Employers of Poland.
The economic growth rate in Poland remains relatively stable, but its structure is quite unusual. In times of economic upturn we are usually experiencing high dynamics of individual consumption and spending on fixed assets, while the value of import grows quicker than that of export. However, this time the situation is completely different. Despite the fact that unemployment is decreasing and real wages are growing at the fastest rate in ca. 7 years, the III quarter is the second consecutive quarter to see a decrease in the contribution of household consumption demand to GDP growth. Investments also look rather weak, the value of which increased by 4.6 percent year to year compared to 6.1 percent in the previous quarter. Poles still prefer to save their surpluses rather than spend it on consumption – which may partially by an effect of long-term deflation. Bad moods on the Polish capital market and the unstable global situation discourage companies from carrying out more ambitious investment plans. Long-term, this may restricted the rate of unemployment decrease, adversely affecting the likelihood of a further improvement on the labour market.
The weakening consumption and fixed asset expense dynamics is compensated for by the positive contribution of foreign trade turnover. Lower domestic currency value increases export competitiveness while at the same time discouraging import. The resulting trade surplus is not caused by an extraordinary power of the export sector, but rather by low import dynamics – which does not testify positively to Poland’s current economic conditions. As long as main growth motors – that is investment and consumption – are not running, it is hard to expect GDP dynamics to exceed the 4 percent threshold.
Łukasz Kozłowski, economic expert of Employers of Poland