Czech and Polish economies likely to have grown strongly in Q1 2017

The Czech and Polish economies are expected to have grown strongly in the first quarter of this year. The flash first quarter 2017 GDP figures          are set to be released this week for the CEE nations. According to an ERSTE research report, the Czech economy is expected to have expanded around 3 percent year-on-year in the first quarter of 2017. The cyclical position of the Czech economy is strong, as domestic demand stays strong and foreign demand has been rebounding since the turn of 2016-2017.

The former is underpinned by the low jobless rate, upbeat confidence of households and households’ expectations regarding the future economic development, whereas the latter is mainly driven by the rebounded economic situation in the euro area. The uncertainty is linked mainly with growth in government consumption that was surprisingly low at 0 percent in the fourth quarter of last year.

Meanwhile, the Polish economy is expected to have grown 4 percent year-on-year in the first quarter of 2017, added ERSTE. This is likely due to the swift growth of industrial production that results from the activation of EU funds for 2014-20 and the base effect. Robust growth of 7.9 percent in retail sales also adds to the economic growth.

“We still observe an increase of consumption, due to the 500+ social program, strong labor market and wage increase (5.2 percent y/y). We see GDP growing by around 3.9 percent annually in 2017”, stated ERSTE.