Domestic demand likely to have mainly driven Polish economic growth in Q1 2019

The final estimate of Polish first quarter GDP growth data is set to release tomorrow. The flash estimate had indicated that the economy grew 4.6 percent on a year-on-year basis and showed no considerable sign of a slowdown. According to an Erste Group Research, domestic demand is likely to have been the main growth driver. Private consumption is expected to have grown strongly, underpinned by slightly more robust growth than in the fourth quarter of 2018.

Meanwhile, investment activity is also expected to have stayed solid. Private investment might pick up, as implied by the recent data about corporate spending on investment, which surged 21.7 percent year-on-year in the first quarter of 2019.

The trade balance rebounded at the start of 2019. Therefore, net exports are likely to have contributed positively to the overall growth figure. The structure might shed some light on the possible future developments, as the beginning of second quarter came in above all expectations and the economy does not seem to be losing any momentum.

“In our view, growth might come in above 4.5 percent y/y in 2Q19 and we see upside risks to our FY19 forecast of 4.2”, added Erste Group Research.