Drivers did not curb purchases, fearing further price hikes
In the sales mix, a dynamic rise in fuel sales (16.2% year‑over‑year) was a surprise, despite strong price increases. The implied deflator for this retail sales category indicates a 7.7% year‑over‑year price rise, after a 4.9% year‑over‑year drop in February.
Despite the announcement at the end of March of the CPN (“Lower Fuel Prices”) program, which lowered excise duties on gasoline and diesel, reduced VAT from 23% to 8%, and introduced daily maximum prices, drivers did not curb purchases, likely fearing further price increases.
Sales are growing
Solid growth in food sales (4.3% year‑over‑year versus 0.2% year‑over‑year a month earlier) is partly attributed to Easter in 2026 occurring earlier than a year ago, boosting demand for food products at the end of March. Despite a deterioration in consumer sentiment in March, demand for durable goods remains.
Sales of cars, motorcycles and parts rose 7.7% year‑over‑year, after a 2.7% year‑over‑year increase in February. A clear uptick in car sales was indicated by SAMAR institute data on vehicle registrations (19.6% year‑over‑year in March versus 6.4% year‑over‑year in February). Textile and footwear sales and pharmaceuticals also grew at double‑digit rates (13.6% and 10.1% year‑over‑year, respectively).
Consumption remains the engine of the Polish economy
March retail data confirm that consumption continues to be the engine of the Polish economy, although a slowdown in real disposable income growth and uncertainty related to the Middle East conflict may slightly curb households’ willingness to shop later in the year.
Retail sales of goods rose in Q1 2026 by about 6.0% year‑over‑year, even faster than in Q4 2025 (5.6% year‑over‑year). In the early months of 2026, weather conditions limited economic activity in industry, especially in construction.
Industrial production rose in Q1 2026 by about 3% year‑over‑year, after a 3.9% year‑over‑year increase in Q4 2025, while construction‑and‑assembly production fell by more than 8% year‑over‑year, versus a 3.0% year‑over‑year increase in Q4 2025. Thanks to consumption, the scale of the GDP slowdown in the first quarter of this year was, however, small.
We estimate that the GDP growth rate in Q1 2026 slowed to about 3.8% year‑over‑year from 4.1% year‑over‑year in Q4 2025.
Throughout the year, we forecast economic growth of 3.4%, although the chances of a better outcome are rising.
