Poland Macro Weekly: It was a chilly summer for CEE economies

TOP MACRO THEME(S):

It was a chilly summer for CEE economies (p.2) – GDP figures for 3q24 from CEE economies have disappointed. While detailed data with growth breakdown will be released later this month, we believe the negative surprise in Poland is mostly due to weaker real consumption growth amid slowdown of real incomes and heightened uncertainty. However, Poland keeps outperforming the rest of the region and we still think it has relatively bright growth outlook for 2025-26.

WHAT ELSE CAUGHT OUR EYE:

Poland’s CA deficit in September was narrower than in August (EUR 1.43bn vs. EUR 2.73bn). On a 12-month basis, the CA surplus shrank to 0.4% of GDP, and we expect it to disappear entirely by end-2024. Import growth (+5.1% y/y) continues to outpace export growth (+0.5% y/y), deepening deficit in trade in goods (to 0.4% of GDP). The services surplus keeps steadily decreasing, but is still high (4.6% of GDP after September). Given expected large EU funds inflows, Poland’s external position remains strong.
CPI inflation in October was confirmed at 5.0% y/y vs 4.9% y/y in September. The rise was due to higher food inflation, which rose to 4.9% y/y from 4.7% y/y a month earlier, and accelerated fuel price growth.
The registered unemployment rate in October remained at 5.0%, according to the preliminary MinLab estimate. The seasonal decline in the number of unemployed was in line with typical October changes seen in the post-pandemic period, though it was smaller than the long-term average.
Fitch Ratings and S&P Global have affirmed Poland's rating at "A " with stable outlook.

THE WEEK AHEAD:

Poland’s macro data to be released in the week ahead include October’s construction output as well as consumer and economic sentiment indicators for November. Besides, MinFin will present a plan to freeze energy prices in 2025.

NUMBER OF THE WEEK:

EUR 9.4bn – value of the request for payment of the EU funds' second and third tranches under the national recovery plan KPO approved this week by the EC.