Driven by strong domestic demand, Poland’s economy grew by 3.5 percent in the second quarter, above the three percent seen in Q1, Central Statistical Office (GUS) data revealed in late August.

By comparison, the EU27 saw its combined gross domestic product grow by 1.7 percent y/y in Q2.

Poland’s result came in above expectations, as analysts contacted by both Reuters and Bloomberg had predicted year-on-year GDP growth of 3.2 percent.

Despite many analysts predicting that exports to the euro zone would power Polish growth, GUS data shows that domestic demand was actually the key driver.

“The main contributor to growth was domestic demand, whose impact on GDP growth was 3.8 percentage points. The impact of total consumption expenditure amounted to 2.2 percentage points,” the statistics office said in a statement.

Poland’s trade balance was in negative territory, indicating the extent of the country’s self-sufficiency. Analysts expect domestic demand to continue to underwrite the economy’s resilience to a shaky global economic environment in coming quarters.

Inward investment fell 1.7 percent y/y, meanwhile, although this represented a significant improvement on the 12.4 percent drop seen in Q1.

Despite domestic demand proving crucial to Poland’s economic growth in 2009, analysts were still surprised at the continuing extent of its influence on the country’s economy. Bank ING, for one, termed domestic demand as being “significantly higher-than-expected.”

“Poland is still distinguished thanks to strong domestic demand,” ING wrote in a market research paper.

On the release of the Q2 GDP data, a number of central bankers publicly predicted that inflation could rise soon, raising the specter of interest rate hikes.

“If we are seeing there is no threat to growth … then I believe we should raise interest rates to cool inflationary expectations,” Monetary Policy Council member, Andrzej Bratkowski, told PAP.