Retail sales in Poland increased 9.6% year-on-year last month, compared to 8.8% growth in February, according to the GUS statistics office.

The figure from March reveals the impact of the arrival of over 2 million Ukrainian refugees into the country, and also the resilient consumption levels despite red-hot inflation, which edged up at 11% year-on-year in March.

The outlook for Q2 and the rest of the year remained broadly favourable due to Poland’s robust labour market and refugees boosting consumer numbers, according to analysts.

“However, due to the expected high inflation, rising interest rates and a less favourable base effect, the annual growth in consumer demand should decline. In our opinion, consumption in 2022 will increase by 4.2% after an increase of 6.2% last year,” according to Bank Millennium.

PKO Bank said overall that “economic growth in Q1 could have even reached 10% y/y, which … is a significant upside risk to our full-year GDP growth forecast of 3.3%”.

Capital Economics added: “A lot of this strength is unlikely to last as the effects of the war in Ukraine bite, but Poland is likely to avoid a contraction and continue outperforming its regional peers this year.”

In addition, six out of a total of eight key retail sectors posted year-on-year turnover gains at constant prices last month, the statistics office went on to say.

Retail turnover, at current prices, grew 22% year-on-year in March, up from 16.5% in February. However, in month-on-month terms, sales added an unadjusted 16.4% and rose 1.4% following adjustment in March, the data showed. There was an unadjusted gain of 22% month-on-month at current prices.

However, the National Bank of Poland is expected to announce another rate rise next month, with the market predicting a 50-basis point increase to bring the rate to 5%.