GDP of Poland, Central Statistical Office data for Q2 2024 and inflation for July. Economists' expectations

On Wednesday, the Central Statistical Office will release a flash estimate of Gross Domestic Product for the second quarter. In the first quarter of this year. GDP increased by 2 percent

According to the PAP Biznes consensus, the Polish economy grew by 2.8% year-on-year in Q2, compared to 2.0% in Q1. Forecasts range from 2.2% to 3.2%. According to the consensus, investments could have fallen by 0.7% (-1.8% in Q1), while private consumption increased by 4.5% (+4.5% previously), and domestic demand by 3.1% (+1.7%).

“After preliminary GDP data in selected EU countries showed disappointing readings, including for Germany, the Czech Republic and Hungary, some investors began to wonder about the risk of a negative surprise in the data from Poland as well. Our forecast, assuming an acceleration of GDP growth to 3.2% y/y, is one of the highest on the market. In our opinion, the set of monthly indicators from Q2 suggests a slight downward risk to this forecast, but not significant. In our opinion, the Polish economy should prove more resistant to the economic downturn in Germany than our southern neighbours, among other things due to the greater importance of the domestic market, which benefits from the recovery of consumption in conditions of rapidly growing wages,” Santander economists say in their weekly preview.

In their opinion, good GDP data for Q2 may support the zloty, which is at relatively weak levels according to technical indicators.

“The strong data published by the Central Statistical Office on wages in Q2 (+14.7% y/y) may also support PLN. The sentiment would also be improved by better GDP and production data from the euro zone. The zloty's recovery would be limited by the strengthening of the dollar or the continuation of the strengthening of the yen,” they added.

– We estimate that GDP growth in Q2 will amount to 2.8 percent year-on-year – ING BSK bank economist Adam Antoniak told PAP. – Based on monthly data, it can be assessed that the economic recovery continued in Q2. We had an increase in industrial production in Q2, which is a significant change, because for the previous five quarters, industrial production had been falling year-on-year. The annual rate of decline in construction production was slightly lower than previously, but retail sales grew more slowly – he added.

He admitted that the result of 2.8% in Q2 this year is slightly weaker than the bank's earlier expectations. Previously, ING BSK economists had forecasted growth of 3%.

Economists from PKO BP expect the same result. – We forecast that GDP growth in the second quarter amounted to 2.8 percent – Urszula Kryńska, economist at PKO BP, told PAP. – We previously thought that the economy would grow faster in the second quarter, above 3 percent, so the result of 2.8 percent is a slight disappointment, but such data does not cancel the narrative that the economy is gradually recovering. What has a negative effect is investments, which probably fell throughout the first half of the year – she indicated, adding that they expect economic growth at the level of 3.5 percent in the whole of 2024.

In parallel with GDP, the Central Statistical Office will provide full data CPI reading for July. In respect of flash inflation in July it amounted to 4.2 percent y/y, and in comparison with the previous month the prices increased by 1.4 percent, compared to 2.6 percent y/y and 0.1 percent m/m in the previous month.

Goldman Sachs analysts expect confirmation of the preliminary reading, which was again below consensus (around 4.5%).

“The July CPI increase was mainly due to the partial expiration of energy shields for households. Legislative actions (…) added about 1.3 percentage points to headline inflation. Food prices also rose to 3.2 percent from 2.5 percent,” they added.