Polish retail sales slowdown in September to weakest in two years

A series of macroeconomic data released recently has brought about slightly mixed impression of Polish economic performance from the third quarter. The retail sales data for September was released today. Sales growth decelerated to 3.6 percent year-on-year in September, the softest figure in two years. However, huge conclusions should not be drawn from one weak monthly figure as it was probably negatively impacted by poor car sales, which had to cope with the launch of tougher fuel emission standards, noted KBC Market Research in a report.

Overall, given the still strong performance recorded by other sectors, GDP growth is expected to come in above 4 percent year-on-year in the third quarter. This is significantly more rapid than that of the euro area, which suggests that the Polish economy is still living a very successful real convergence story.

Even the rating agencies have noticed the very healthy-looking Polish economy eventually when they scored the country at the end of last week. Thus, S&P decided to increase Poland’s sovereign rating from BBB+ to A-, and justified this action, inter alia, with the rapidly accelerating growth that leads to falling relative debt ratios. Furthermore, S&P highlighted that a further rating upgrade might be considered if wages in Poland continue to grow rapidly while avoiding deterioration of the Polish balance.