Poland’s gross domestic product expanded 0.9% quarter-on-quarter in the second quarter, outpacing market expectations of a 0.7% increase, according to preliminary data released on Friday.
The growth was driven primarily by domestic demand and a rebound in the services sector, which offset weaker industrial output. Household consumption rose 1.1% quarter-on-quarter, while government spending increased 0.8%. Fixed investment grew 0.5%, signaling cautious business sentiment despite elevated borrowing costs.
On an annual basis, GDP expanded 3.1% year-on-year, down from 3.8% in the first quarter. The deceleration reflects tighter monetary policy, with the National Bank of Poland maintaining its benchmark rate at 6.75% since October 2023 to combat inflation.
The zloty strengthened 0.3% against the euro following the release, with traders citing the better-than-expected growth as a marginal tailwind for the currency. Economists noted that while the headline figure suggests resilience, underlying momentum remains uneven across sectors.
Poland’s economy has outperformed several regional peers this year, but risks persist from a slowdown in key export markets, particularly Germany. The European Commission’s latest forecasts project Poland’s GDP growth at 3.3% for 2024, revised downward from 3.7% in its spring outlook.
The central bank is expected to maintain its restrictive stance until inflation pressures ease further. Consumer prices rose 4.2% year-on-year in June, above the bank’s 2.5% target, though down from a peak of 18.4% in early 2023.
