Polish economy fared relatively well in the second quarter and its GDP growth exceeded most other EU countries. GDP also grew faster than economists estimated. Details show that domestic demand keeps its pace thanks to investment activity and exports improved. Domestic demand rose 1.4% over previous quarter and 4.3% compared to the previous year. Consumption expenditures continue to grow but at lower pace. Household expenditures decelerated to 3.5% from 3.9% in Q1 yoy, government spending declined by 1.3% after rising 1.5% yoy in previous
quarter. Investment expenditures offset the weaker growth of consumption. Gross fixed capital formation increased by 7.8% after 6.0% yoy in Q1. Net exports marginally improved as exports accelerated more than imports. Poland enjoys an advantage that its GDP growth is based on solid domestic demand in contrast to the Czech Republic or Hungary which decelerated in Q2 as their growth is more export led and the Euro area, the main trading partner, started to lose the steam. Polish economy cannot escape worsening economic weather in global economy; however, it is better positioned than its peers in the region. Our forecast for GDP in 2011 remains 4.0%.
Actual (Q2): 4.3% yoy
Consensus: 4.2% yoy
Previous (Q1): 4.4% yoy