GDP growth records best result since Q3 2022 in Q2

GDP reading: According to a preliminary reading, GDP growth accelerated to 3.2% year on year in the second quarter, from 2.0% in the first quarter and marking the strongest expansion in nearly two years. On a seasonally-adjusted quarter-on-quarter basis, economic growth improved to 1.5% in Q2, compared to the previous quarter's 0.8% expansion

Drivers: Domestically, household spending increased 4.7% in the second quarter, which was above the first quarter's 4.6% expansion. Meanwhile, fixed investment rebounded and grew 2.7% in Q2 (Q1: -1.8% yoy), On the other hand, public consumption growth edged down to 10.7% in Q2 (Q1: +10.9% yoy). Externally, net exports detracted from overall growth in Q2, in contrast to Q1’s positive contribution: Exports of goods and services growth improved to 3.4% in Q2 (Q1: +0.5% yoy), while imports of goods and services rose 5.4% in Q2 (Q1: -0.1% yoy).

Panelist insight: ING analysts Piotr Poplawski and Rafal Benecki commented on the outlook: “GDP growth in the second half of the year should remain driven mainly by consumption and public investment (largely military). The slow rebound in the eurozone (especially seen in the disappointing data for the current quarter) does not bode well for Polish exports and also discourages companies from investing. There is also no major improvement in non-military public investment, which is more likely to rebound in 2025.”

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