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Poland’s economy to slow down to 1 pct in 2023 says ING

Polish economic growth will decelerate this year to 1 percent, slightly above market expectations, economists from ING have said.

The bank’s experts issued a statement on Wednesday in response to the publication of a new report from S&P Global with data on Poland’s manufacturing sector purchasing managers’ index (PMI).

The report showed that the index rose to 48.5 pts in February from 47.5 pts in January as output and new orders declined at a slower pace, and price pressures slightly eased.

“The upward movement in the PMI was principally reflective of weaker declines in both production and new orders,” the report said. “The falls were the slowest recorded in the respective 10- and 12-month contraction sequences.”

A decrease in inflationary pressure and signs of market stability led to an improvement in business confidence, S&P said, noting that expectations were the highest in 10 months.

A reduction of inventories took place for the ninth consecutive month, “largely due to costs consideration,” although the pace of the reduction was the weakest since September 2022, the report said.

ING economists, Rafal Benecki and Piotr Poplawski pointed out that the February PMI index in the domestic processing industry was at the highest level since May 2022.

They said that, although the PMI is still below 50 points, which suggests decreasing activity, “it should still be remembered that the index for months suggested a clearly worse economic situation than actually reported by the Central Statistical Office.”

In their opinion, Poland’ latest PMI data suggests that: “The Polish economy will experience a slowdown, but it will be shallower than assumed by the market consensus.”

“Our GDP forecast for this year, 1 percent, remains in force… We are slightly less pessimistic than the consensus,” they added.

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