Polish GDP ballooned a seasonally adjusted 10.7% y/y in the second quarter after retreating 1.3% y/y in the preceding three months, the Central Statistical Office (GUS) said in a flash estimate on August 13.
The all-time high flash reading sees off Poland’s COVID-19 (coronavirus) induced recession for good, even if the steep gain was predictable, as measured against the recession’s worst point in the second quarter of 2020.
“The key question for the coming quarters is how strong the current underlying trend in GDP growth is. Recent business sentiment surveys indicate that the GDP growth rate at the beginning of the third quarter has steadied at slightly above 5%, which is consistent with our baseline scenario,” the state-controlled bank PKO BP said in a comment on GUS' figures. “Therefore, we stick to our full-year GDP growth estimate of 5.4%,” PKO BP added.
Poland’s economy has now reopened virtually in full after intermittent lockdowns crippled activity in October-March. It is not clear, however, what impact the highly transmissible delta variant of the coronavirus will have, with the government expecting a return to some restrictions after August.
A new surge in coronavirus cases is expected, as Poland’s vaccination campaign has largely stalled with some 50% of the population fully vaccinated and the pace of new inoculations glacial.
A detailed breakdown of the flash reading – together with a possible revision of the data – is scheduled for publication on August 31.
“The relaxation of restrictions in May supported the rebound in domestic demand, including household consumption and the continued strong performance of investment. Market services should also be strong,” ING said in a rough assessment.
“The strength probably reflected the re-opening of the economy, with personal care services re-opening in April and restrictions on food and accommodation lifted in May. Monthly data show that industry and retail sales continued to expand at a solid pace too,” Capital Economics said.
In unadjusted terms, Poland’s GDP expanded 10.9% y/y in Q2 versus a fall of 0.9% y/y in January-March, GUS data also showed.
In quarterly terms, economic growth expanded an adjusted 1.9% in Q2 after adding 1.3% q/q in the first quarter.
In 2020, Poland's GDP declined 2.7% in one of the world's mildest coronavirus-driven recessions.