Poland: Buoyant domestic demand pushes growth to six-year high in 2017
According to preliminary estimates released by the Central Statistical Office of Poland (GUS) on 30 January, GDP grew 4.6% in 2017. The result was above 2016’s weaker 2.9% expansion and represented the strongest reading since 2011.
An increased absorption of EU development and investment funds drove a rebound in fixed investment, which expanded 5.4% in 2017 (2016: -7.9%), boosting GDP growth. Moreover, private consumption growth accelerated to 4.8%, above 2016’s already robust 3.9% rise. Household spending was underpinned by a tightening labor market and robustly rising wages, together with low inflation and handouts to families from the government so-called ‘500+’ child benefit scheme. Overall, domestic demand rose 4.7% in 2017, marking a significant acceleration compared to the 2.2% increase recorded in 2016.
On the other hand, the external sector’s contribution to growth moderated, likely due to growing inflows of capital goods imports. As a result, the external sector made a positive 0.1 percentage points contribution to growth, down from the previous year’s 0.7 percentage-points contribution.
A flash estimate of Q4 2017 GDP data will be released on 14 February, and detailed data for 2017 GDP will be published on 15 May.