Poland's trade balance worsened by supply of armaments in Q1 2025 - c. bank
In the first quarter of 2025, there was another deep decline in exports in the category of means of transport and their parts, Poland's central bank NBP wrote in an overview on its full balance of payments for the period. It added that China was the main beneficiary of the increase in demand for foreign goods in Poland, and the trade balance was worsened by the supply of armaments.
In the first quarter of 2025, the value of exports decreased by 1.2 percent year on year to PLN 359.0 billion (EUR 84.4 bln). A decrease in volume contributed to the decline in the value of exports.
The goods exports declined by 2.2 percent year on year in real terms, against a decrease of 2.6 percent in the fourth quarter of 2024. This was the eighth consecutive quarter of decline in exports at constant prices.
In contrast, the positive impact on the change in value was driven by a 0.5 percent year on year increase in the transaction price of exports, which was compounded by an increase in world trade price indices and a simultaneous reduction in the scale of the appreciation of the nominal PLN exchange rate.
"The real growth of goods exports is negatively affected by the continued low demand growth in the European Union countries, which are the main recipients of goods from Poland, as well as growing competition from exporters from other countries, especially non-European countries," NBP explained.
"The biggest impact on the decrease in the value of exports in the first quarter of 2025 was another deep decline in exports in the category including means of transport and their parts," it added.
In the first quarter of 2025, the upward trend in goods imports initiated in the third quarter of last year strengthened. In the analysed period, its value increased by 4.5 percent year on year to PLN 373.1 billion (EUR 87.3 bln).
Both the increase in its volume (by 2.7 percent year on year) and the increase in transaction prices (by 1.5 percent) contributed to the growth in imports.
The increase in imports of goods at the beginning of 2025 was mainly driven by an increase in consumer demand.
"The volume of imports of consumer goods recorded double-digit growth during the period, by far dominating changes in other categories. In turn, rising food prices had the greatest impact on the increase in import prices," NBP reported.
"Continued strong growth in imports from non-European countries contributed to an increase in their importance in total imports to nearly 40 percent. The main beneficiary of the increase in demand for foreign goods in Poland was China," it added.
The biggest contributor to the deterioration of the goods trade balance in the first quarter of 2025 was the reduction in the surplus in consumer goods and means of transport.
Poland's central bank stressed that the positive balance in transport equipment fell to its lowest level since 2020, while the surplus in consumer goods fell to its lowest level since 2018.
"In addition, higher deliveries of armaments also contributed to the deterioration in the balance," NBP pointed out.
tus/ ao/