Poland's GDP growth at 3.8 pct in 2025, forecasts maintained, say PKO BP experts (opinion)
Economists of Poland's largest lender by assets PKO BP maintain their forecast for Poland's GDP growth at 3.5 percent in 2024 and 3.8 percent in 2025. The revival is expected to be driven by domestic demand, mainly consumer demand, which will be joined to a greater extent by investments.
"Fitting into our optimistic scenario, the data make us maintain our forecast of an acceleration in GDP growth to 3.5 percent in 2024 and 3.8 percent in 2025. The source of the recovery will be domestic demand, mainly consumer demand, which will be joined by investment with greater impetus in 2025," the experts said in the report.
"This time the revisions to our forecasts are not significant, as before. In general, since the beginning of the year the macro scenario for the world and for Poland has been realising quite well, there are no big surprises," PKO BP chief economist Piotr Bujak told a press breakfast.
According to Bujak, the forecast for 2024 above consensus at 3.5 percent is supported by the latest GDP data for the second quarter (3.2 percent year on year).
"This reassures us that 3.5 percent growth for the full year is possible. This is a very solid result, above many estimates of the potential growth of the economy," he added.
In Bujak's view, however, this is to some extent an 'apparent recovery', as it only affects a certain slice of the economy - the consumer - and only in real terms.
"In nominal terms, the whole economy, and even consumption, which is relatively strong, is slowing down. In retail, this consumer recovery is not felt. Most retail companies, also listed on the WSE, are complaining about consumer strength," he pointed out.
PKO BP's economists assess that in 2025, the growth of consumption (both private and public) will start to dim, when the real growth of wages and social benefits will be markedly lower than this year, and investment will become an equally important growth driver, boosted, among other things, by the momentum in EU-funded projects.
"Investments in energy transformation, automation or arming, among others, will be realised. Government investment in road and electricity infrastructure should also accelerate in 2025, especially considering post-flood reconstruction needs," PKO BP's experts said in the report.
"Over the forecast horizon, economic growth will be constrained by net exports. The reason for this is the continued stagnation in the eurozone, with increasingly strong domestic demand driving up imports. To a large extent, it will be related to purchases of military equipment," they added.
The main sources of uncertainty for PKO BP's forecasts are: the condition of the export sector in the face of rising costs (including the energy transition) of the German downturn; the development of real household income and its savings rate; fiscal and monetary policy; the course of the war in Ukraine and its consequences; and finally - the pace of implementation of the national recovery plan KPO.
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