Poland’s economy grew at a rate of 2.0 percent in 2012, according to preliminary estimates released by the Central Statistical Office (GUS) last week. The figure represents a significant slowdown on 2011, when Poland’s gross domestic product grew by 4.3 percent. GUS said that the biggest reason behind the growth was an increase in net exports, while domestic demand and investments were not as strong as in previous years.

GUS hasn’t yet released official GDP growth figures for the fourth quarter of last year, but analysts said the preliminary annual figure likely meant that the Polish economy grew by about 1 percent in Q4. In Q1, Poland’s GDP grew by 3.6 percent, in the next quarter it decelerated to 2.3 percent, and in Q3 it fell again to 1.4 percent. The last time GDP growth was lower than that was in the second quarter of 2009, when economic growth reached just 1 percent.

A worrying trend for economists is Poland’s rapidly dropping consumer spending, which was widely seen as one of the main engines driving the country’s economy as it rode out the 2009 financial crisis as the only EU country not to go into recession.

“Even though investments contracted in Q4 less considerably than we had feared (by only 0.4 percent y/y), the decline of consumer demand at the end of the year (-1 percent y/y) is a major disappointment and may herald a lower consumption path in the upcoming quarters,” economists at Bank Zachodni WBK said in an e-mailed statement.

The economists said that they expect the economic cycle to bottom out in the first quarter of this year, followed by a gradual recovery with no threat of high inflation.

“Although the GDP data were better than we expected, their general message is dovish due to really weak consumption,” they added. The data justify two further interest rate cuts in February and March by the National Bank of Poland’s Monetary Policy Council, they said.

Andrew Kureth

Source: Central Statistical Office, BZ WBK