Polish stable economic growth likely to continue, but may ease towards trend

In 2017, the Polish economy expanded strongly by 4.6 percent and strong momentum has continued through the second quarter of this year. This makes most commentators super bullish about 2018 growth – but, such a view is based on past data mainly, noted Commerzbank in a research report.

The German weak economic patch is a more recent development, which is not yet seen in the Polish data. Economic confidence rose last year, driven by solid demand from Germany and the euro area, which stimulated fixed asset investment. However, this rate of activity was above trend.

Highly supportive monetary conditions in euro area have been a driving force, and so have been EU funds for infrastructure projects. Stable growth is likely to continue, but gradually calm down towards trend. Special factors, which would still underpin growth in 2018 are the government’s Family 500+ fiscal program, and  the continued tapping of EU funds, which would likely add around 0.5 percentage point to GDP growth, said Commerzbank.