Page 8 - Poland Outlook 2020

expected to fade), a 15% spike in minimal wage that irked employers, and an extra pension payout, the two latter developments pledged by the PiS government in 2019, the year of general election.
That said, the dynamics of consumer spending are forecast to deteriorate with some - albeit slight - increase in tendency for Poles to stash away money rather than spend it, lack of new government stimuli similar to 500+, and companies’ expected to begin restructuring. Companies’ becoming a little wary about business perspectives will have many Poles worry at least a bit about employment, even if restructuring is not expected to be too harsh for employees. Still, that could restrict consumer spending further.
Investment is expected to weaken as well. Foreign trade is forecast to hold well, as Polish exporters have shown ability to hedge against sluggishness in Poland’s main trade partner Germany by redirecting to other markets.
• GDP growth
After three quarters of 2019 it is now clearly visible that Poland’s initial resilience to the economic downturn in the Eurozone has faded.
Q3 GDP growth fell short of expectations coming in at 3.9% y/y vs. 4.6% y/y in the previous quarter. While this is still a solid result in historical terms, the pace of the decline was the fastest since Q1 2016 which marked the beginning of the previous economic slowdown. Consumer demand growth at 3.9% y/y was lower than in Q2 despite the additional fiscal stimulus in Q3.
Given the slight deterioration in consumer confidence and in households’ expectations for the next 12 months it is likely that part of additional income is now being cautiously saved and will be spent in the next quarters.
Furthermore, in 2020 there will be additional impulse in the form of 15% higher minimal wage and another 13th pension payment which will increase disposable income of households. This would therefore point to only
mildly slowing consumer demand growth in 2020.
2020 household consumption forecasts from selected banks operating in Poland, in %
BNP Paribas 3.8
Credit Agricole 3.3
Citi Handlowy 4.2 mBank 3.6
Deutsche Bank Polska 4 Alior Bank 4.1
Bank Pekao 4
BOŚ Bank 3.8
Santander Bank Polska 4.1 Bank Pocztowy 3.7
PKO BP 4.5
Bank Millennium 4
Bank Śląski 3.9
(source: Puls Biznesu)
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