Poland recorded GDP growth of 10.9% year-on-year in the second quarter of 2021, according to preliminary data from Statistics Poland (GUS), a government agency. That represents the largest single increase since such records began in 1995.
GUS also confirmed a previous estimate that inflation hit 5% year-on-year in July, which equals the highest level since August 2001.
Source: GUS
The preliminary GDP data published today are stronger than anticipated by analysts. As well as the record year-on-year growth, the economy grew 1.9% from Q1 2021. The final data will be published on 31 August, but the figures usually do not change much.
“The Polish economy has recovered from pandemic losses!” wrote analysts from PKO BP, Poland’s largest bank, adding that the country was “on the path of rapid growth”.
“We bounced back faster than our trading partners. In our opinion, both consumption and investment were strong,” tweeeted analysts at ING, noting that the size of Poland’s economy has now surpassed its pre-pandemic level, whereas Germany’s and the eurozone’s remain smaller than before.
Wzrost PKB w 2kw 2021 wyniósł 10,9%r/r – blisko oczekiwań naszych i konsensusu. Oznacza, to że PKB Polski jest już powyżej poziomu sprzed pandemii (4kw 2019). Odbiliśmy się szybciej niż nasi partnerzy handlowi. Silna była naszym zdaniem zarówno konsumpcja jak i inwestycje. pic.twitter.com/Jze1GImVJH
— ING Economics Poland (@ING_EconomicsPL) August 13, 2021
In mid-July, the International Monetary Fund (IMF) revised up its forecasts for Poland’s GDP growth, putting the figure at 4.6% for 2021 and 5.2% for 2022, reports TVN24.
The European Commission also adjusted its forecast for Polish economic growth at the start of July, from 4% to 4.8% in 2021. But it lowered the figure for 2022 from 5.4% to 5.2%.
In its figures released today, GUS also confirmed that year-on-year inflation stood at 5% in July, matching the preliminary estimate it made at the end of that month. That is the joint highest figure in almost two decades.
Mainly driven by rises in the prices of food, energy and fuel, Poland has recorded the highest or second highest level of inflation among all European Union member states in every month since March last year, according to Eurostat
According to the new GUS breakdown, prices in July rose by 4.6% for goods and 6.2% for services year-on-year. Inflation hit 3.1% for food and non-alcoholic beverages, 6.2% for energy, 5.6% for recreation and culture, 6.1% for restaurants and hotels and 18.5% for transport.
W lipcu 2021 r. #ceny towarów i usług konsumpcyjnych w porównaniu do lipca 2020 r. wzrosły o 5,0% (wskaźnik cen 105,0), a w stosunku do czerwca 2021 r. wzrosły o 0,4% (wskaźnik cen 100,4).https://t.co/fAFxguNC4K#GUS #CPI #WskaźnikCen #statystyki #inflacja pic.twitter.com/sbbMhWgRgO
— GUS (@GUS_STAT) August 13, 2021
Earlier this year, the Polish central bank’s monetary policy council said that accelerating prices were only a temporary phenomenon and kept its key interest rate at 0.1%, unchanged since May 2020.
The all-time-low borrowing costs are intended to bolster economic recovery from the pandemic, despite inflation surpassing the NBP’s target of 2.5% (allowing for a one-percentage-point deviation).
Main image credit: Mariusz Cieszewski/Ministry of Foreign Affairs of Poland (under CC BY-NC 2.0)
Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.
