What will 2019 be like for Polish economy?
2018 is finally over. For Polish economy and businesses, the past twelve months were marked by record-high employment and strong GDP growth. What can entrepreneurs expect in 2019?
Business experts are certain: next year we are going to experience a slowdown. After the good days there always come bad days. There are sign indicating that the peak of the economic cycle is already behind us. From now on, one may expect that GDP growth will cease to increase. According to the predictions, the economy will be developing at the rate of approximately 4 per cent, down one percentage point from what we witnessed in 2018.
PMI index, which reflects the state and expectations of the manufacturing industry and the services sector and serves as the litmus test for the entire economy, keeps deteriorating. The December data show a fall to 47.6 percentage points (down from 49.5 in November), while the number above 50 is considered improvement. This is bad news for the Polish industry.
Polish economy is heavily dependent on the state of foreign markets, Germany in particular. The country to the west of Poland is a big importer of our goods. The German economy, like the entire EU, is showing the signs of cooling off too. In fact, GDP slowdown is expected to be a trend for the 2019 around the globe. What we also see is the rise of protectionism, which may have negative impact on industry.
What we will likely witness in 2019 is the rise of inflation which may shake the consumer spending numbers. Polish economy is fuelled by consumption, which in 2018 rose due to low unemployment and rising salaries. This year, prices of goods and services will be affected by rising fuel and electricity prices.
One needs to remember that global economy is cyclical, and it is completely normal for periods of great expansion to be followed by times of slowdown. In 2018, Poland was among the states with the highest GDP growth in Europe. The economy will keep developing, but at a slightly slower rate.