Real GDP in Poland increased by 1.6% in 2013 compared with 2.0% in the previous year. In the first half year, the growth rate was just 0.7% y/y, but then it started to increase and, in the last quarter, it was 2.7% y/y.
2013 was a year of stagnant domestic demand following a 0.1% decline in the previous year. The obvious decrease in domestic demand had been observed earlier, from Q2 2012, and it continued until mid-2013. A real decline in income from 2012, with a higher rate of unemployment and a low rate of savings, resulted in two successive years of the lowest individual consumption growth since the mid-nineties. Individual consumption in 2013 increased by just 0.8%, which is even weaker than in the previous year. Once again, investments in fixed assets also declined (annual decline of 0.2%), while the change in inventories still had a negative impact on GDP growth.
Structure of GDP growth in 2008-2013
However, starting from the third quarter, domestic demand gradually started to recover. In light of real growth in income and symptoms of improvement on the labor market, stagnant individual consumption was finally interrupted, with its growth rate estimated at around 2.1% y/y in the last quarter of 2013. Investments in fixed assets also started to increase in the third quarter. The turnaround in the declining trend of investments may form evidence of noticeable improvement in the outlook for demand and the financial standing of companies.
In light of stagnant domestic demand, economic growth was once again possible in 2013 as a result of the achievement of a positive balance of foreign trade. The situation improved gradually in 2013 on the main markets for Polish exports, which remained competitive. The gentle recovery in domestic demand in the second half of the year did not lead to a sufficiently high increase in imports, significantly reducing the scale of the positive impact exerted by net exports on GDP growth.