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Consumption Drives Y/Y GDP Contraction, Q/Q Growth Stays Volatile Due To Seasonal Adjustment

POLAND

Following the release of below-forecast preliminary Q2 GDP data out of Poland, local analytical desks pointed to weaker consumption as a key factor weighing on overall growth, flagged expectations of economic recovery going forward, and criticised the seasonal adjustment mechanism which generates highly volatile readings.

  • ING expect that Q3 will bring only a minor improvement in growth momentum, while a stronger economic rebound will only come in Q4.
  • mBank flag a "recession" which in their view was effectively in place since 2Q2022 (recent quarterly GDP readings were highly volatile). They expect GDP to return to growth in the coming quarters.
  • Pekao maintain their 2023 GDP growth forecast at +0.4% Y/Y. They note that seasonally adjusted GDP looks "completely absurd," with SA GDP posting the largest quarterly decline on record, save for the COVID contraction. They write that whether Poland is experiencing a recession depends on a definition (no technical recession due to misleading seasonal adjustment by the statistics office, no NBER-type recession, but an annual contraction in GDP).
  • PKO note that GDP contraction deepened to -0.5% Y/Y in Q2 from -0.3% prior, likely on the back of weaker consumption. They expect a return to positive readings from Q3, due to a rebound in consumption (a consequence of rising real wages) and strong investments. They say that quarterly growth remains very volatile.
  • The Polish Economic Institute write that the weak outturn for Q2 GDP was caused by a decline in consumption, with household spending falling by 1.5% Y/Y, while investment and net exports softened the blow. They cast doubt on the reliability of the seasonally adjusted Q/Q figure. They expect economic recovery in the following quarters, with GDP expected to grow by 0.7% Y/Y this year.

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