PMR report: Macroeconomic factors will slow down the growth of the OTC market
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The development of the OTC market is strongly correlated with the economic situation in Poland, especially in relation to the situation of households. Good macroeconomic indicators have been driving growth in this segment for many years.
High private consumption will drive growth of the OTC market
According to PMR’s forecasts, after a further strong acceleration of economic growth in 2018 (in real terms, the growth rate was 5.1%), economic growth is expected to slow down in the coming years. However, GDP growth will continue to be above 2.8% over the entire forecast horizon. Growth in the coming years will be driven mainly by high private consumption, supported by a good situation on the labour market, i.e. rising wages and low unemployment.
The high dynamics of household consumption, increase in household expenditure on medical and pharmaceutical products as a result of increasing health care, increase in disposable income (e.g. the impact of the 500+ programme, including the announced abolition of the income threshold for the first child as of July 2019) and good situation on the labour market will contribute to a strong increase in the value of the OTC market in Poland.
Ageing population generates demand for OTC
Moreover, the demographic factor is quite a significant reflection in the forecasts – the number of elderly people generating significant demand for drugs and dietary supplements is increasing.
However, the forecast horizon foresees a slowdown in the OTC market growth rate as a result of the expected slowdown in private consumption growth and wage growth, stabilisation of the unemployment rate, or a decrease in the number of employees (as a consequence of the decreasing number of people of working and pre-working age).