August 17, 2022 10:44 GMT
- This morning, economic data showed that Poland GDP came in significantly below expectations in Q2, falling by 2.3% QoQ (vs. -0.7% exp.) and decelerating to 5.3% YoY.
- However, we have been surprised by analysts’ optimism given the sharp tightening in financial conditions, which are currently pricing in a significant deceleration in the economic activity in the coming 6 to 12 months.
- For instance, Poland 2Y10Y yield curve has been deeply inverted in the past two months, and is expecting the economy the plunge into a recession in H2.
- The chart below shows that Poland 2Y10Y yield curve has strongly led the business cycle by 6 months in the past two decades.