The August report from the National Bank of Poland (NBP) paints a mixed picture of the country’s external position: a deepening current account deficit and falling exports on one hand, but stable services and strong foreign capital inflows on the other. While the monthly data are far from optimistic, Poland’s medium-term economic fundamentals remain solid.
Current Account Deficit Widens Sharply — Driven by Trade
NBP data for August 2025 show a significant deterioration in the current account balance, which ended the month with a deficit of €3.1 billion, well below market expectations of €1.3–1.6 billion. The figure came as a substantial negative surprise to economists. However, the still-strong inflow of foreign capital, approaching €40 billion year-on-year, is viewed as a mitigating factor.
According to the Polish Chamber of Commerce (KIG) and NBP, the current account deficit reached –€3.09 billion in August, compared with –€1.17 billion in July and –€2.02 billion a year earlier. This marked the second consecutive month of results well below forecasts.
The main factor behind the deterioration was merchandise trade. The goods deficit widened to –€2.15 billion, up from –€1.06 billion in July. Both exports and imports declined, but exports dropped much more sharply — by 12% month-on-month. Exports totaled €24.99 billion, while imports reached €27.14 billion.
Notably, the share of exports in GDP (based on the 12-month cumulative total) fell to 37.9%, marking the 29th consecutive monthly decline. For comparison, in March 2023 this share stood at 49.2% — a level well above pre-pandemic norms. This downward trend suggests a slowdown in Poland’s external trade dynamics.
Services Remain the Key Stabilizer
Against the backdrop of weaker goods trade, services continue to stand out as a pillar of stability in Poland’s balance of payments. The services surplus amounted to €3.16 billion in August, up slightly from €3.01 billion in July.
Although services exports fell seasonally from €9.7 billion to €9.45 billion, the annual growth rate remained positive at +2.5% year-on-year. Imports of services totaled €6.29 billion, up 8.2% from a year earlier.
This resilient services sector — encompassing transport, IT, business services, and outsourcing — helps offset the deterioration in the goods balance and keeps the overall current account deficit moderate.
Primary and Secondary Income Deepen the Deficit
Primary income outflows (mainly profits and wages transferred abroad) also weighed on the balance. The primary income deficit widened from –€3.0 billion in July to –€3.9 billion in August. Secondary income (including private and public transfers such as remittances and EU grants) posted a –€210 million deficit, compared with –€102 million a month earlier.
Economists point out that August typically brings seasonal weakness in exports and higher dividend payments to foreign investors — both of which tend to worsen the current account during this period.
Foreign Investors Continue to Back Poland
Despite weaker current account data, August brought a rebound in capital inflows. Foreign direct investment (FDI) reached €884 million, a strong recovery after July’s outflow of –€872 million. Portfolio investment inflows stood at €536 million, compared with a robust €4.7 billion in July.
Over the past 12 months, total foreign capital inflows (FDI and portfolio combined) have reached €39.9 billion, of which €18 billion represents direct investments. Analysts view this as a very strong performance, especially in comparison with other Central and Eastern European economies.
“August was weaker, but it doesn’t change the overall picture. The deeper deficit reflects seasonal export weakness and large income outflows to foreign investors. Fundamentals remain strong — the services balance is stable, and foreign capital continues to flow in, showing investor confidence in Poland’s economy. It’s not a warning signal but rather a temporary soft patch after several excellent months,” said Piotr Soroczyński, Chief Economist at the Polish Chamber of Commerce (KIG).
Deficit Still Moderate in Annual Terms
On a 12-month rolling basis, the current account deficit stands at €8.5 billion, equivalent to 0.96% of GDP — a level economists consider safe and not indicative of external imbalance. In July, the figure was 0.84% of GDP.
Analysts emphasize that Poland remains among the economies with stable external positions, supported by robust investment inflows that provide a buffer against short-term trade fluctuations.
If the strong investment trend continues and export conditions improve in the fourth quarter, the balance of payments could return to a more balanced position. For now, experts stress that this is not a red flag, but a seasonal softening following an extended period of positive results.
