IPAG raises GDP growth forecast for this year

The Institute for Economic Forecasting and Analysis (IPAG) has raised its forecast for Poland's GDP growth for this year to 4.2 percent from 3.8 percent expected in May this year. The institute estimates GDP growth in Q2 2022 at 4.9 percent y/y. In the following quarters of 2022, positive economic growth is expected to be maintained, but it will be significantly lower than in the first half of the year.

"The main factors for the expected slowdown will be primarily higher interest rates, the unprecedented level of inflation, which is currently one of the biggest problems for the Polish economy, and the high level of uncertainty further undermining consumption and investment. According to IPAG, the gross domestic product will grow by 4.5 percent for the whole of 2022, and by 2.5 percent the following year. This represents an upward revision of earlier forecasts for the current year and a downward revision for the following year," the Institute's quarterly report reads.

The Institute notes that in the sphere of individual consumption in the second half of this year and 2023, the effects of high inflation and falling wage dynamics, as well as rising interest rates, will become dominant.

(Alebank)