Poland's economy somewhat cools down in Jan, but rebound likely in Feb

Poland's real economy data for January disappointed, suggesting some cooling probably because of political developments. Industrial output was down m/m and retail sales and construction data also turned weaker. The manufacturing sector suffered one-off hits in January; and a sharp surge in public sector orders which had boosted December data, reversed.

The decline is not totally out of line and much can be attributed to political developments. However, retail sales increased by a meager 0.9% y/y in Jan vs. consensus expectation of 3% gain; this should be of concern because household consumption is the primary growth driver in Poland right now.

"We know that sentiment in Poland has cooled down somewhat because of political developments, and the PMI has dropped back to near 50. But, we anticipate a partial rebound in the February industrial data, and expect retail sales to re-accelerate once the child benefit scheme is activated. " said Commerzbank in a report.