Poland: GDP growth gains momentum in the fourth quarter
Annual GDP growth steps on the gas: According to a preliminary estimate, annual GDP growth accelerated to 3.2% in the final quarter of 2024 from 2.7% in the third quarter. On a seasonally adjusted quarter-on-quarter basis, economic growth also gathered momentum, accelerating to 1.3% in Q4, following the previous quarter’s 0.1% increase. In 2024 as a whole, the economy expanded 2.9%, up notably from 2023’s 0.1% rise.
Household consumption spearheads acceleration: Annual private consumption growth picked up to 3.5% in Q4 compared to Q3’s 0.3% rise. Fixed investment growth also accelerated to 1.3% in Q4, contrasting the 0.1% expansion logged in the previous quarter. However, public consumption growth ticked down to 3.0% in Q4 (Q3: +4.5% yoy).
On the external front, exports of goods and services rebounded, growing 0.5% in Q4 (Q3: -0.7% yoy). However, imports of goods and services growth strengthened to 3.3% in Q4 (Q3: +1.9% yoy).
Economic growth to improve further in 2025: The economy should gain further speed in 2025. Inflows of EU funds and rising demand from the Euro area will boost growth in fixed investment and exports. Additionally, household spending will remain resilient, despite higher inflation and elevated interest rates for most of the year. Downside risks include delayed reform progress, a trade war between the EU and the U.S. and heightened geopolitical uncertainty.
Panelist insight: EIU analysts said:
“Although our growth forecasts for most of Poland’s key trade partners in western Europe remain weak, the extension of the household electricity price cap will ensure strong household demand in Poland. Fiscal spending will remain strong, while another major driver of growth in 2025 will be a rebound in investment spending, at 5.9%. Poland will be better placed to draw down its EU budget allocation in 2025 following the unblocking of funds, leading to a boom in investment. A potential upside risk stems from a possible bump in trade flows as companies prepare for higher tariffs under the Trump administration by front-loading purchases.”