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2024/06/07 / Erste Group Research

Strong private and public consumption behind growth

Polish economy saw an acceleration of GDP growth in the first quarter of 2024, with private and public consumption fueling the expansion. However, high frequency data keeps sending mixed signals, especially for industry. We are also seeing signs of strong willingness to save among households, a possibility we outlined as a threat to the consumption-based growth story. Inflation keeps surprising to the downside, staying inside the target band for now. The medium-term outlook points towards more intense price pressures, especially in late 2024 and early 2025.

The monetary policy remains in waiting mode, with the first cut expected sometime in 1Q25. Consistently lower inflation throughout 2024 would be a tail risk scenario, which could put pressure on the MPC to cut earlier. The current NBP outlook supports a strong zloty for the foreseeable future, as it has been moving inside the 4.25-4.30 band in recent months. The local elections in Poland tested the current ruling coalition, with results showing fairly similar results to the parliamentary elections in October. The 10Y yield remains volatile, but it could reverse its upward climb seen since the beginning of the year.

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General information

AuthorErste Group Research
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Economy in focusPoland
Currency in focusPolish Zloty
Sector in focus-