Measures of Polish consumer confidence hit an all-time high in August, data showed on Thursday, signalling that growth in the European Union's largest eastern economy could accelerate further. The leading and current index of consumer confidence rose in August to their highest levels since the launch of the survey two decades ago, data from the state statistics office GUS showed.
Earlier this week, a different set of data showed construction output rising by 19.8 percent in August from a year ago in a sign that investment may have finally rebounded following a prolonged slump. "Taking into account the most recent data on trends in consumption and investment, GDP growth may soon near 5 percent," said Piotr Bujak, chief economist at state-run bank PKO BP.
With record low unemployment powering a rise in consumption, Poland's economy grew by 3.9 percent year-on-year in the second quarter despite little help from investment. The statistics office will publish a breakdown of growth on August 31. Investment declined throughout last year and likely was flat in the second quarter, economists said, partly due to lower inflows of European Union aid.
Critics of the right-wing Law and Justice (PiS) party which came to power in late 2015, had said the fall in investment was partly due to more unpredictable domestic policy under PiS. The PiS government launched a child benefit programme in the first half of 2016 worth about 1 percent of GDP, put in place a special tax on bank assets and passed legislation to reduce the retirement age starting from October 2017. The government also improved tax collection, managing to increase tax revenues by an annual 18 percent in the first half of the year.
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