Poland's GDP growth slows down in Q3

17 Nov 2022

Poland's GDP growth decelerated to a seasonally adjusted 4.4% year-on-year in Q3, following revised growth of 5.6% year-on-year in the previous three months, according to the Central Statistical Office (GUS).

Although remaining fairly robust, this latest reading confirms previous analysis that declining inventories would weigh on economic activity in the second half of the year after driving growth in Q1.

"The economy has entered a slowdown phase, and the reversal of the inventory cycle deepened the decline in GDP growth," PKO Bank Polski said in a statement.

Although these flash estimates by the Central Statistical Office do not provide a detailed analysis of growth drivers, analysts forecast private consumption growth eased significantly from 6.4% year-on-year in Q2 to 1.6% year-on-year in Q3. An investment growth slowdown is also forecast, BNE Intellinews reports.

However, the economy was more resilient than predicted between July and September. "Taking Q3 results into account, this year's GDP growth may reach 4.8%. However, the following quarters will bring a clear slowdown," according to Bank Millennium.

"In the first months of the next year, annual GDP growth will be negative, even though economic growth in the entire 2023 should be positive but will not exceed 1%," the bank added.

In addition, the Central Statistical Office said Poland's economy grew 0.9% quarter-on-quarter, contracting 2.3% in Q2.

The GDP growth slowdown also boosts forecasts that what the National Bank of Poland referred to as a "pause" in monetary policy tightening is actually the end.

The central bank maintained rates at 6.75% for the second straight month in November, noting fears over the policy tightening's impact on the economy.

Furthermore, Poland's GDP grew 3.5% year-on-year in Q3 compared to a revised gain of 5.8% year-on-year in Q2, according to the GUS data.

In 2021, Poland's GDP grew 6.8% after contracting 2.2% in 2020.