Disturbing data from the Central Statistical Office. It’s worse than expected

Preliminary estimates from the Central Statistical Office brought unexpected news – Polish GDP recorded a decline in the third quarter of 2024. Even though economists predicted moderate growth, the actual result surprised them with the scale of the economic weakening. Although the annual dynamics increased by 2.7% compared to the previous year, the Polish economy shrank by 0.2% compared to the second quarter of this year. Forecasts indicated an increase of 0.2%, which makes the result a significant negative surprise.

Data discrepancy

The Central Statistical Office reported that revisions of data from previous quarters are responsible for the discrepancies between the annual and quarterly dynamics. GDP for the second quarter of 2024 was revised from the previous 1.4% quarterly growth to 1.2%, and for the first quarter from 0.8% to 0.6%. The annual dynamics have also been corrected, which additionally affects the overall picture of this year’s economic results.

Due to the early nature of the estimates, detailed data on the impact of individual sectors on GDP will be available only on November 28. GDP growth so far in 2024 has been mainly driven by private consumption and government spending, while corporate investment has had a small positive impact.

Retail sales are falling

At the same time, the results were negatively affected by shrinking inventories and net exports. Falling retail sales in September may mean further weakening in consumption, which could have contributed to the weak result for the third quarter.

The year 2024 was widely considered to be a period of recovery from the recession of earlier quarters. Back in the summer, analysts estimated Poland’s GDP growth at 3% annually, with forecasts ranging between 2.6% and 3.7%. After weaker third quarter results, more optimistic forecasts may be revised downwards. Meeting expectations of annual growth of 4% or more now seems unlikely.