Economic comment

We analysed Polish consumer spending patterns over Easter. An analysis based on extensive Statistics Poland (GUS) retail sales data suggests that Easter boosts total retail sales by around 1.5% m/m, with a clear increase visible in stores selling food, beverages and tobacco products as well as in other non‑specialised retailers (i.e. supermarkets).
By contrast, an analysis of detailed card transaction data, tracked day by day, indicates that increased shopping activity begins on the Monday before Easter, peaks on Maundy Thursday and Good Friday, and is around 35% higher than usual. From Holy Saturday onwards, in‑store activity drops sharply, but by the Tuesday after the holidays it already returns to normal levels. Overall, therefore, the Easter effect in retail lasts eight days. (...)

March retail sales surged by 8.7% y/y, significantly outperforming even our optimistic forecast of 7.5% y/y (market consensus stood at 5.7% y/y), and accelerating from 5.0% y/y in February. This marks the strongest annual growth in retail sales since April 2022. In our view, March’s exceptionally strong outturn was supported by several one-off factors, so April is likely to bring a worse reading. In April, consumer confidence worsened significantly for the second month in a row on growing worries, but it does not look like growing fuel prices forced consumers to reduce spending. The decline in producer prices of basic agricultural products deepened in March to –11.5% y/y, from –9.9% y/y a month earlier.

After the first two months of the year, marked by heavy snowfall and frosts but weak in terms of economic activity, we finally saw a solid rebound in March, exceeding both market expectations and our estimates. Industrial output recorded a 9.4% y/y increase, the strongest in 3.5 years, while construction and assembly output rose by 0.4% y/y and as much as 37% m/m. Activity in the housing market also looked strong in March, as did wage growth in the enterprise sector, which accelerated to 6.6% y/y, versus market expectations of 6.3% y/y. Employment, however, surprised to the downside, declining by 0.9% y/y. PPI inflation reacted sharply to the surge in global energy commodity prices, moving up to -0.8% y/y from -2.0% y/y in February. Overall, the March data tell us that GDP growth may have remained close to 4% y/y in 1Q.