Poland: Economy records sharpest contraction since Q4 2020 in the second quarter
According to a preliminary reading, GDP slid at a sharper pace of 0.6% year on year in the second quarter, below the 0.3% contraction tallied in the first quarter. Q2’s reading marked the worst print since Q4 2020.
The downturn was driven by weakening private consumption and exports. Private consumption contracted 2.7% in Q2, marking the steepest decline since Q4 2020 (Q1: -2.0% yoy). Government consumption bounced back, growing 2.6% in Q2 (Q1: -0.5% yoy), while fixed investment expanded 7.9% in Q2, following the 5.5% increase logged in the previous quarter.
On the external front, exports of goods and services contracted 2.7% in Q2, marking the worst reading since Q2 2020 (Q1: +3.2% yoy). In addition, imports of goods and services dropped at a more pronounced rate of 8.1% in Q2 (Q1: -4.6% yoy).
On a seasonally adjusted quarter-on-quarter basis, economic activity dropped 2.2% in Q2, contrasting the previous period’s 1.6% growth. Q2’s reading marked the largest contraction since Q2 2020.
Commenting on the outlook, Rafal Benecki, economist at ING, stated:
“A gradual rebound in late 2023 and 2024 should be supported by a recovery in private consumption, given improving real household disposable incomes and better consumer sentiment. However, households remain cautious and the revival in consumption is likely to lag the recovery in real purchasing power.”