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Poland growth accelerates in Q3

Poland growth accelerates in Q3

WARSAW: Poland’s economic growth accelerated at the start of the third quarter, underpinned by strong expansions in both industrial production and retail sales in July, Liam Carson, an economist at Capital Economics, said.

The annual retail sales growth accelerated to 6.8 percent in July from 5.8 percent in June. Similarly, industrial production growth picked up to 6.2 percent from 4.5 percent, official data showed on August 18.

“The raft of strong Polish activity data for July suggests that the economy grew by around 4.5 percent y/y at the start of the third quarter,” Carson said, adding that the pace would exceed the rapid rate of expansion seen over the first half of the year.

Further, construction continued to recover in July, following a slump last year related to a drop in EU structural fund inflows.

Construction output grew 19.8 percent in July from last year, marking its best performance since the start of 2012.

“Nonetheless, we think this golden period of strong economic growth will soon start to fade,” the economist cautioned.

Capital Economics expects growth to hit a peak in Q3, before losing momentum in 2018-19 as the EU fund-related rebound in construction fades, interest rates rise and fiscal policy becomes less supportive.

“While our 2017 GDP growth forecasts sit towards the top of the consensus range, we expect growth to be weaker than most analysts expect in 2018-19,” Carson said.