Poland's GDP up, but forecasts for the future pessimistic
22:02
Poland's GDP grew in real terms by 8.5 percent y/y in the first quarter of 2022, the Central Statistical Office said on Tuesday. This is the second highest result in the 21st century. However, the Polish economy is already entering a phase of marked deceleration, economists argue.
It is worth remembering that the reading was influenced by the low base from a year ago. In the first quarter of 2021, the Polish economy contracted by 1.2 percent y/y.
It should be noted that the 8.5 percent jump in GDP was in real terms, i.e. after taking into account the impact of inflation. In nominal terms, i.e. by adding the price growth rate, the domestic economy grew by ca. 20 percent.
Such a result was indicated by data coming from the economy. Since the beginning of the year, industrial production in Poland has been growing at a double-digit rate. In March it was 17.3 percent y/y, in February the growth was 17.6 percent and in January as much as 19.2 percent.
However, it should only get worse in the coming weeks.
"The slowdown in the second part of the year will be evident – the GDP growth rate will fall below 3 percent. A surge in inflation and higher loan servicing costs will hit consumer spending in the second half of the year. In addition, some companies will freeze investment projects due to material shortages and economic uncertainty," experts from the Polish Economic Institute predict.
The economy is burdened with high inflation. Or rather, the necessity to fight it, which for the NBP means raising interest rates. This in turn leads to a reduction of both consumption and investments.
