Poland, GDP (2012): 2.0%
Previous (2011): 4.3%
Consensus: 2.0%, KBCS forecast: 2.0%
Poland, Private Consumption (2012): 0.5%
Previous (2011): 2.5%
KBCS forecast: 0.6%
Poland, Investments (2012): 0.6%
Previous (2011): 9.0%
KBCS forecast: 0.8%
Bottom line: Poland’s annual economic growth slowed to 2.0% in 2012, in line with consensus and our forecast, compared to 4.3% in 2011. Full-year private consumption and investments both came somewhat below our forecast, suggesting most probably higher contribution of net exports or less negative inventories contribution to growth than we had forecasted. The full-year GDP data confirm that economic activity in Poland continued to slow down in 4Q12, with further deceleration of private consumption and investments dynamics. We now estimate 4Q12 GDP growth at around 0.5%y/y, with private consumption at -0.9%y/y and investments at -3.2%y/y (official quarterly figures will be released on March 1st). We continue to expect further slowdown in GDP growth in 1Q13, to around 0.1%y/y, amid continued deceleration of private consumption and investments. We expect GDP growth to pick up modestly in 2Q13 amid a rebound in Germany helping Polish exporters, as well as lower inflation domestically and lower interest rates supporting consumption. We look for full-year 2013 GDP growth at 1.2%. The today released figure, confirming that Polish economy visibly lost steam in 4Q12, will likely contribute to the MPC decision not to make a pause in monetary easing in February and cut interest rates again by 25bp at its meeting next week.
• Private consumption remained sluggish in 2012, posting full-year growth at 0.5% compared to 2.5% in 2011, slightly below our forecast of 0.6%. Private consumption dynamics peaked in 1Q12 at 1.7%y/y and slowed down in the subsequent quarters of 2012, amid weakening labor market conditions, worsening consumer sentiment and fiscal consolidation restricting public spending.
• Investments slowed down sharply in 2012, to 0.6% from 9.0% in 2011, somewhat below our forecast of 0.8%. Investments peaked in 1Q12 at 6.0%y/y and decelerated visibly in subsequent quarters, as major public infrastructural projects were completed before EURO 2012. At the same time, corporate sector investments stayed weak due to uncertain demand outlook and weak global sentiment.