World Economy

Polish Q3 Growth Fastest in 5 Years

Polish Q3 Growth Fastest in 5 YearsPolish Q3 Growth Fastest in 5 Years

Poland’s economy expanded at its fastest pace in more than five years in the third quarter, data showed on Tuesday, signaling investment has finally rebounded and joined consumption in driving growth.

Gross domestic product grew by 4.7% year on year, the fastest since the end of 2011, a first estimate from the statistics office showed. Analysts polled by Reuters expected growth at 4.5%.

“Consumption has sustained its large contribution into GDP growth thanks to high wage dynamics and the budget stimulus,” said Rafal Benecki, chief economist at the ING Bank Slaski. “A new element that is helping GDP is investment,” he said, adding that capital expenditure growth likely picked up to about 5% year-on-year in the three months to September.”

The statistics office will present a detailed breakdown of growth on Nov. 30.

Investment in Poland declined throughout last year, partly due to lower inflows of European Union aid. But double-digit growth in construction output in the last few months had signaled a turnaround.

Unemployment has fallen to 6.6%, an estimate showed last week, its lowest level since Poland’s transition from communism in the early 1990s. Poland’s central budget posted its biggest surplus of the last quarter century in the first nine months of 2017 thanks to, among other things, double-digit growth in value added tax revenue. Analysts polled by Reuters expect economic growth to pick up to 4.1% in 2017 from 2.7% in 2016.

The statistics office said that in the July-September period seasonally-adjusted GDP grew by 1.1% quarter-on-quarter compared with a revised 0.9% expansion in the three months to June.

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