Polish industrial output likely to have grown in March, retail sales growth to have eased slightly

The Polish industrial output and retail sales data for the month of March is set to release this week. According to an Erste Group Research report, the industrial output growth is likely to have grown 4.1 percent year-on-year in the month, as compared with market expectations of 4.5 percent year-on-year growth. However, growth at about 4 percent in March might suggest that growth of industry accelerated in the first quarter of 2019 compared to the previous quarter. Such good performance goes against market confidence that has been consistently implying softer growth for over half a year.

“A slowdown scenario does not seem close, as our Now Casting model for Poland implies GDP growth only slightly below 5 percent in the 1Q19”, said Erste Group Research.

Meanwhile, retail sales growth is likely to have been a bit lower from February’s growth and from average growth of nominal retail sales slowing slightly in the first quarter as well. According to Erste Group Research, retail sales are expected to have grown 5.5 percent year-on-year, an easing from 6.5 percent in February. However, overall, private consumption should continue to mainly drive growth.

“The tight labor market supports high levels of household spending. On top of that, another round of fiscal stimulus is likely to give a further boost to retail sales figures in 2H19”, added Erste Group Research.