GDP Marginally Better Than Expected Amid Recovering Consumption & Slowing Investments

Statistics Poland released flash Q1 GDP data. The economy grew 1.9% Y/Y in the three months through end-March, marginally exceeding the consensus forecast of +1.8%. The sequential, seasonally-adjusted outturn was +0.4% Q/Q versus +0.6% expected, with the previous reading revised lower to -0.1% from flat.

• ING note that the data were slightly better than expected, with consumption serving as the engine of economic recovery. They point to a deterioration in investments, maintaining their full-year forecast of +3.0% Y/Y.
• mBank speculate that the upside surprise in the headline number may have been due to significantly better-than-expected investments, while refusing to offer a more detailed explanation based just on preliminary data.
  
• Pekao write that GDP rose faster than their expected, apparently as the services sector (which there is least information about) fared better than manufacturing and retail sectors. They note that they "don't believe" in a positive input of investments into GDP, without providing further details.
• PKO note that a strong recovery in consumption and significant slowdown in investments likely determined the overall result. They expect the coming quarters to be better, with growth averaging at +3.7% Y/Y this year.
  
• The Polish Economic Institute say that a growth rate of +1.9% Y/Y was a "moderate" result compared with forecasts from the beginning of the year. They note that growth was powered by both consumption and investments, with inventories representing a negative input. They expect activity to accelerate in 2Q24 but mostly based on consumption, with investments set to remain much weaker. In their view, growth will stabilise in 2H24, with the inflow of EU aid in 4Q24 not expected to materially change the picture before next year.