spending growth moderated to +3.9% y/y, but public spending rose by +6.4% thanks to fiscal stimulus ahead of the elections in fall and fixed investment surged by +12.6% in Q1 on the back of a continued strong utilization of EU funding for eligible projects. However, inventories subtracted -1.6pp from Q1 growth. External trade activity eased in Q1 as demand from the Eurozone cooled, with exports expanding by +5.9% y/y and imports by +5%, so that net exports contributed +0.7pp to growth in Q1. Meanwhile, Poland’s corporates continue to face headwinds. Despite the economic boom over the past few years, non-payment risk has risen since 2016, reflected in an average annual increase of +10% in corporate insolvencies in 2016-2018. We expect insolvencies to increase by another +10% in 2019, posing particular risks to large-scale suppliers of Polish companies.
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