Two-speed Polish spending favours durables over essentials
The recent data from Poland indicates a dichotomous consumer spending trend, prioritizing durable goods over essential items. Per the full note from ING, retail sales growth in August reached 3.8% YoY, falling short of expectations, driven by weak sales in food and fuel sectors. Durable goods, however, showcased strong resilience, particularly in furniture and electronics, suggesting a shift in consumer behavior amidst economic pressures such as slowing wage growth. This environment could influence currency dynamics, especially for PLN-related trades moving forward.
What the desk is arguing
The desk posits that the current consumer spending landscape in Poland, marked by increased demand for durable goods at the expense of essentials, may have broader implications on the PLN and associated currency pairs. Per the full note from ING, August retail sales rose by 3.8% YoY, below the forecast of 5.1%, indicating a significant divergence in consumer behavior amidst economic challenges.
Sales of durable goods like furniture and electronics surged by double digits—11.7% and 10.6%, respectively—highlighting a potential shift in consumer priorities as they navigate inflationary pressures. This strong durable goods demand persists despite a backdrop of rising fuel prices, which have negatively impacted spending on essentials such as food and beverages, growing only 1.0% YoY, as noted in the source.
Where it sits in our coverage
Our consensus target for PLN-related pairs reflects a bullish bias, with expectations set at 1.075 for the EUR/PLN. Key forecasts include: - jpmorgan: Target of 1.10 by March 2026. - bofa: More conservative with a target of 1.04.
This outlook aligns with the cross-firm consensus, as our target sits at the upper end of the spread, indicating a stronger PLN against the euro ahead.
How other firms see it
Most firms express alignment with a bullish stance on PLN, believing that resilience in durable goods could bolster the currency. However, some, like bofa, express a contrary view, suggesting a more cautious approach to PLN based on broader economic conditions.
As we consider the implications for the EUR/PLN straddle, monitoring durable goods sectors and central bank narratives will be crucial for anticipating market shifts.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Polish retail sales experienced 3.8% YoY growth in August, below consensus forecasts, reflecting weakened essential spending.
- 02Demand for durable goods remained exceptionally strong, showcasing double-digit growth in categories like furniture and electronics.
- 03The divergence in consumer behavior amidst economic pressures could influence PLN's future performance against major currencies.
- 04Overall consumer optimism is tempered by slowing wage growth and increased transport costs.
Market implications
Traders should monitor the strong performance of durable goods as a signal for potential PLN strength, particularly against EUR. A sustained focus on consumer confidence may indicate movement toward our target level of 1.075 for the EUR/PLN.
Risks to this view
A reversal in consumer spending trends, particularly if wage growth accelerates or if fuel prices stabilize, could undermine the durable goods demand thesis, potentially leading to weakened PLN against the EUR.
Older quick take Quick take Published 10:05 Poland Two-speed Polish spending favours durables over essentials August retail sales growth fell short of expectations amid soft sales of fuels and food. Still, demand for durable goods remained robust, with double-digit growth in furniture, electronics and household appliance sales. Consumers face slowing wage growth and higher transport costs, but fixed investment should keep buoyant growth in 2H26 A clear split has emerged between strong durable goods demand and subdued spending on essentials in Poland Dichotomy in retail sales categories Polish retail sales increased by 3.8% year-on-year in August (ING: 5.1%; consensus: 4.5%), following growth of 3.9% YoY in July.
Seasonally adjusted data points to a 1.0% month-on-month increase in sales. August's data also shows a divergence in consumer spending patterns; demand for durable goods remained strong, while spending on essentials such as food and fuel was subdued. We expected stronger fuel sales given the temporary reduction in VAT on gasoline and diesel in the second half of August.
Growth in pharmaceutical sales also slowed compared with previous months. The strongest sales increases were recorded in sales of motor vehicles and parts (11.7% YoY) as well as furniture, consumer electronics and household appliances (10.6% YoY). After two months of double-digit growth, pharmaceutical sales decelerated to 6.2% YoY.
Meanwhile, growth remained weak in food and beverage sales (1.0% YoY) and fuel sales (1.1% YoY). Diversity in consumer spending trends Retail sales (real), %YoY Source: GUS, ING. "> Source: GUS, ING. Consumers under pressure of slowing real income growth The August figures confirm that slowing wage growth and higher fuel prices are putting pressure on part of the consumer sector.
Interestingly, this has not materially affected demand for durable goods, while consumers appear to be cutting back on essential spending. One possible explanation is a divergence in spending patterns between higher-income households with accumulated savings and less affluent consumers, who may be facing tighter budget constraints and living hand-to-mouth. We continue to expect private consumption growth to return to above 3% YoY in 3Q26, following growth of 2.8% YoY in 2Q26, although the consumer is no longer as strong a driver of the economy as in 2025.
Investment will remain an important engine of growth, with investment growth in 3Q26 potentially exceeding the 8.4% YoY recorded in the previous quarter. We currently estimate GDP growth in 3Q26 at around 3.5% YoY and 3.4% for the year. GDP Consumption Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives.
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