A robust rise in consumption drove Poland's economic growth in the fourth quarter of last year, data showed on Tuesday, also signalling that a decline in investment that weighed on growth throughout 2016 could be coming to an end. The statistics office confirmed on Tuesday that economic growth accelerated to 2.7 percent year-on-year in the fourth quarter, compared to 2.5 percent in the three months to September.
In seasonally-adjusted terms, growth was confirmed at 1.7 percent, the highest level in nearly a decade. In year-on-year terms, consumption rose by 4.2 percent, its fastest pace in eight years, supported by a child benefit programme launched by the conservative government of the Law and Justice (PiS) party last year. "Consumption was the main engine of growth in the fourth quarter," bank PKO BP said in a note. "The declining trend in investments has turned." A breakdown of fourth-quarter growth published for the first time on Tuesday showed total consumption added 2.6 percentage points to the annual growth rate, while foreign trade contributed 0.3 percentage point. Investment subtracted 1.6 percentage point, while inventories added 1.4 percentage point.
Investment fell by 5.8 percent year-on-year, compared to a decline of 7.7 percent in the third quarter. The decline in investment was caused by, among other things, a slowdown in the inflow of European Union funds. Some economists have said higher policy uncertainty under the PiS government also hurt investment. A deputy economy minister said this month the economy would receive a "very strong" impulse from EU funds in the second or third quarter. "I am relaxed about EU-funded investments this year," Deputy Economy Minister Jerzy Kwiecinski said.
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