Figures presented by the StatOffice reveals the Polish economic rebound its led by private and public consumption. The office revised its 1Q24 GDP estimate to 2.0% year-on-year from 1.9% earlier.
On the expenditure side, household consumption jumped by 4.6% YoY, public consumption increased by 10.9% YoY, and fixed investment declined by 1.8% YoY. The change in inventories subtracted 2.8 percentage points from the 1Q24 annual GDP growth rate. Foreign trade added 0.4 percentage points. On the supply side, value added in manufacturing increased by 0.2% YoY, construction fell by 8.9% YoY, and trade and repair rose by 4.4% YoY..
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The sources of GDP growth in 1Q24 did not surprise experts, nor did they present a very optimistic picture of the economy. As expected, the recovery is primarily driven by a gradual rebound in consumption. Despite the higher propensity of households to save, the buoyant growth in real disposable income is translating into an increase in purchasing activity. Robust growth of labour income (double-digit growth in nominal wages and salaries) and proceeds from social benefits (high indexation of pensions and child benefits, among others) are supporting consumers. This is accompanied by a marked fall in inflation from very high levels last year. There was an impressive increase in public consumption (10.9% YoY) boosted, among other things, by an increase in public sector wages.
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