Experts expect GDP growth to ease below 3% year-on-year again in the third quarter of the year. In the fourth quarter, activity may be supported by post-flood reconstruction.
Experts do not expect any serious negative impacts from the recent flood in the south of Poland on economic activity at the macro level. It was a relatively small part of the country that suffered and no major significant producers were impacted. If anything, the reconstruction and rebuilding of lost wealth may actually slightly boost economic growth in the fourth quarter and in 2025.
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August's monthly data pointed to increased headwinds to Polish economic recovery in the third quarter, particularly from poor external demand. Analysts have revised the third quarter GDP forecast to 2.8%YoY from 3.1%YoY. While they still anticipate 3% economic growth for the year, the downside risks have increased again.
Upward pressure on inflation from destroyed crops and lost inventories is also unlikely to be substantial. The flood may marginally delay fiscal tightening as public support will be needed for areas. Authorities intend to devote PLN23bn (around 0.6% of GDP) to aid (including EU funds) and provide some tax reliefs.
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