Poland's GDP increased by 1.9 percent in the first quarter compared to the first quarter of 2019 - results from the CSO's quick estimate. However, the quarterly decline was 0.5 percent. It is almost certain that in Q2, as a result of the freezing of the economy, the quarterly decline will be many times stronger, which means the first recession in the history of the Third Republic.
A quick estimate of GDP is that it contains no more details than the main number, and in particular there is no breakdown into component parts. What is known from Eurostat data is the fact that in March the consumption of households, particularly durable consumer goods (e.g. consumer electronics and household appliances) slowed down sharply in March. This is the result of two phenomena.
On the one hand, some stores were closed and some only had limited online sales. On the other hand, consumers, fearing dismissals, slashing salaries and the severity of the crisis, withheld larger expenses until the situation crystallized. In Q2, the phenomena only deepened, so a further drop in consumption can be expected. Construction has gone through a relatively dry rate during the first quarter - construction and assembly production increased by 5.8 percent against a 4 percent drop in 2019 Q4. This may indicate a positive impact of investment on GDP, which, however, will change in Q2. Net exports probably also had a positive contribution to GDP growth, which, however, may change in Q2 as a result of breaking many global supply chains.
Grzegorz Maliszewski, chief economist at Millennium Bank, expects that the second quarter will bring a double-digit decline in GDP, but the third will be the beginning of a revival.
"The pandemic will have a destructive impact on the economy in Q2, which is reflected in our 10% decline in GDP expected by us y / y or even more," Maliszewski says..