Polish economy likely to have grown strongly in 2018

The first estimate of Polish economic growth in 2018 is set to release this week. According to an Erste Group Research report, the annual GDP growth is likely to have come in at 5.1 percent year-on-year, while the market sees the growth dynamics as being slightly lower at 5 percent year-on-year. In spite of the slightly disappointing monthly performance of the economy in December, the rate of economic growth throughout last year should stay strong.

“Actually, it is very likely to be the highest growth rate since 2011. We believe that private consumption remained the main driver of growth last year, supported by recovering investments” said Erste Group Research.

The retail sales and industrial production data for December implies that the softening confidence in Western Europe and Poland is visible in economic activity and hints at decelerating growth in the coming quarters. Therefore the Polish economy is likely to slow down gradually to 3.8 percent in 2019.

Meanwhile, the preliminary reading of the manufacturing PMI in January disappointed in Germany and arrived at 49.9 last week. For Poland, the market expects a marginal recovery of the PMI, from 47.6 in December to 48 in January.

“However, overall market sentiment has been weakening and a PMI below the threshold of 50 suggests that industrial output growth is losing strength”, added Erste Group Research.