Poland’s economic growth quickened to the fastest pace in two years as record-low borrowing costs revived investment and consumer spending.
Gross domestic product jumped 3.3 percent from a year earlier last quarter, compared with 2.7 percent in the previous three months, according to a preliminary estimate published today by the Central Statistical Office in Warsaw. That exceeded the 3.1 percent median estimate of 27 economists surveyed by Bloomberg. GDP rose 1.1 percent from the previous quarter.
Poland is set to outperform the European Union’s largest post-communist members this year and in 2015, according to a spring forecast by the European Commission. Borrowing costs have been kept at a record low since July and policy makers have pledged to keep the key rate unchanged until at least the end of the third quarter to bolster consumer demand and investment.
“The economy is getting increasingly driven by corporate investments and private consumption,” Adam Antoniak, an economist at Bank Pekao SA in Warsaw, said by phone before the release. “What’s important is that exports remain strong.”
Fixed investment accelerated to 6.1 percent from a year earlier in the first three months and may peak at 9 percent in the final quarter of this year, according to monthly internal forecasts by the central bank cited by policy maker Andrzej Kazmierczak in a May 9 interview.
Private consumption probably quickened to 2.8 percent on improved labor-market conditions and higher wages, he said. The unemployment rate fell to 13.5 percent in March from 14.3 percent a year earlier, while inflation-adjusted wages increased 3.4 percent, the most since 2008.
As Poles began to spend more, the retail business of the nation’s biggest oil refiner, PKN Orlen SA, reported a record 234 million zloty ($76.6 million) of earnings before interest, taxes, depreciation and amortization in the first quarter. Sales at gas stations grew 6 percent after a 5 percent drop during the year-earlier period.
Corporate and household borrowing both jumped at the fastest pace in 18 months in April, gaining 6.4 percent and 5.8 percent from a year earlier, the central bank said yesterday.
“The figures indicate further economic recovery supported by rising domestic consumption and investments, though the inflation data show this remains accompanied by no apparent price pressures,” Gabor Ambrus, an economist at 4CAST Ltd. in London, said in an e-mailed note before the GDP publication.
The Polish economy is set to double its pace of growth, according to the European Commission, which predicts GDP will rise 3.2 percent in 2014 and 3.4 percent in 2015 after last year’s 1.6 percent expansion.
The zloty strengthened to 4.1797 per euro at 10:10 a.m., up 0.2 percent from yesterday and paring its loss on the quarter to date to 0.3 percent. The yield on the government’s 10-year bond fell four basis points to 3.69 percent.
“High economic growth combined with low inflation is building up a positive scenario for the Polish debt market,” Konrad Soszynski, an economist at PKO Bank Polski, said in an e-mailed note. “The scenario is based on good state budget revenue and a delayed prospect of interest-rate increases.”
Policy makers will probably review their forward guidance in July, central bank Governor Marek Belka said May 7. The current approach may be retained, with the 10-member Monetary Policy Council in “very wide consensus” on rates, he said.
The inflation rate unexpectedly fell in April to a 10-month low of 0.3 percent, sending nine-month forward rate agreements below the three-month Wibor for the first time since July, a sign traders predict a rate cut rather than an increase.
The statistics office will report a breakdown of first-quarter GDP on May 30.