POLAND: GDP growth beats expectations in Q2

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Despite a long period of mourning following the presidential airplane crash in April and heavy flooding that affected large parts of the country, Poland's gross domestic product (GDP) rose by 3.5% (seasonally unadjusted) in April-June, beating average expectations for 3.2%. The Q1 figure stood at 3%.

Seasonally adjusted figures released by the country's Central Statistical Office (GUS) showed the economy expand by 3.8% y/y in Q2 2010 vs. a growth of 3.1% y/y in the previous quarter. The real growth against the preceding quarter came to 1.1%.

The key driver of growth, according to GUS, was domestic demand, which contributed 3.8 percentage points (pps) to the final result. The gross value added in the Polish economy increased by 3% y/y in Q2.

Domestic demand was higher by 3.9% in comparison with Q2 2010, while total consumption rose by 2.8% (including a 3% growth in individual consumption).
 
Although investments managed to pick up from a serious slump in January-March, gross fixed capital formation was still 1.7% lower than in Q2 2010, bringing the investment ratio (gross fixed capital formation to GDP) down to 17.8% (from 19.4% a year earlier).