Domestic demand likely to have mainly driven Polish economy in Q1 2018

Polish first quarter economic growth structure might affirm domestic demand as pillar of growth. According to an Erste Group Research report, no major revision is expected in the first quarter growth dynamics, which according to the flash estimate, reached 5.1 percent year-on-year and 1.6 percent sequentially.

The GDP breakdown should affirm that domestic demand was the main driver of growth, with private consumption keeping a strong rate of about 5 percent and investment growth recovering. Solid retail sales throughout the first quarter and increasing consumer confidence underpinned a high level of spending. Even if performance of industry was slightly softer throughout the first quarter of this year, construction output growth rose sharply, implying that investment activity mostly likely rebounded. The degree of the recovery would be a crucial piece of information, particularly after the significantly downward revision of investment growth in the fourth quarter of 2017, stated Erste Group Research.

Meanwhile, market projects that the PMI index is expected to have dropped from 53.9 in April after the trend of easing market sentiment on core markets.

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