Encouraging start to Poland’s second quarter

ING Global Economics Team ING Economic and Financial Analysis

While economic growth eased slightly in 1Q25 after a solid 4Q24, we find some encouraging signs in the April data, suggesting the second quarter brought some improvements. GDP growth in 2025 in excess of 3% still looks a safe forecast. However, the expected rebound in fixed investment is likely to come later than previously expected.

In the first quarter of 2025, Poland’s GDP rose by 3.2% YoY, slightly below the 3.4% YoY posted in 4Q24. The momentum also decelerated with 1Q25 economic growth at 0.7% QoQ (SA) after 1.3% QoQ in 4Q24. Construction output in particular surprised to the downside, signalling that the expected rebound in fixed investment is lagging. That is to some extent associated with the slow implementation of projects financed from the Recovery and Resilience Fund (RRF). So far, authorities have spent just PLN20bn (only PLN10bn in 2025) from PLN109bn (€25bn) grants assigned to Poland. On top of that, the country has access to PLN149bn (€34.5bn).

More optimistic signs come from other parts of the economy. Manufacturing output is improving, which may be a signal of recovering export demand. At the same time, April retail sales surprised to the upside, rising twice as high as the market consensus. Economists expected a jump in sales due to the Easter effect, which was indeed visible in the food sales data, but demand for durable goods continued improving as well.

All in all, the beginning of 2Q25 brings encouraging signals that GDP growth accelerates, but we remain cautious in our assessment for the year as a whole and still see economic growth this year at 3.2%. Stronger demand for Polish exports and firmer domestic demand for durable goods may turn out to be temporary, as businesses and households may bring forward purchase decisions in order to avoid potentially higher prices of products after potential increases in global tariffs.

What is more, the uncertainty linked to the outlook for global trade amid the shaky and unstable tariff policy of the new U.S. administration under President Trump may also weigh down on business and household confidence over the medium term. Nevertheless, we see room for optimism and Poland is likely to remain an economic growth leader in the European Union in 2025 as well, following strong performance in the recent years.

Read the original analysis: Encouraging start to Poland’s second quarter

Author

ING Global Economics Team

ING Economic and Financial Analysis

From Trump to trade, FX to Brexit, ING’s global economists have it covered. Go to ING.com/THINK to stay a step ahead.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.