Poland Macro Weekly: Recovery at full steam

TOP MACRO THEME(S):

Good marks for the start of 4q23 (p.2) – October heralds a very good start of 4q23 and supports our scenario of growth accelerating to 2.2% y/y in the final quarter of this year, with a robust performance of investment accompanied by (at last) a noticeable growth in consumption.

WHAT ELSE CAUGHT OUR EYE:

Economic downturn and deflation at producers’ level translated into weaker results of non-financial corporations in 3q23, whose return on net sales declined to 4.1% against 4.7% on average in 2018-2022. Revenue growth turned negative for the first time in 3 years. Meanwhile, investments of large companies (50+ employees) in 3Q23 grew (in real terms) 13.7% y/y compared to 13.6% y/y in 2Q23, driven by investments in machinery and equipment (19.5% y/y) and means of transport (21.2% y/y). We attribute this to the need for quick adjustments in the energy infrastructure (the effect of surge in energy prices) and unblocking of supply chains in the automotive sector.
The European Commission issued a positive opinion on the modified National Recovery Plan for Poland under RePowerEU energy transformation program, which increases the overall amount of funds that Poland could receive to approx. EUR 60bn from initial EUR 35bn (approx. EUR 25bn of grants and EUR 35bn of loans). According to the Ministry of Funds and Regional Policy, Poland will soon receive 20% of these new funds (over EUR 5bn), which do not depend on the fulfillment of the milestones.
The (old) government adopted and passed to the parliament a draft bill extending energy shields (electricity, natural gas, heat) for 2024.

THE WEEK AHEAD:

Flash CPI for November and detailed GDP numbers for 3q23 will be in focus locally on Thursday (more on p.4). One day later we will get manufacturing PMI for November while the S&P Global may present review of Poland’s rating (we expect it to be affirmed at A- with stable outlook).

NUMBER OF THE WEEK:

-9% – monthly fall in FX mortgage loans in Oct. stemming from a change in reporting population, which we see just as a one-off adjustment.