The Polish economy in 2024 significantly accelerated compared to the minuscule growth in 2023, and this year’s GDP should increase by nearly 3%. This will be achieved despite not the best data from the industry, which is affected by the weakening condition of the German economy. In October, economists were disturbed by the unexpected decline in retail sales. However, according to the economist from the Polish Economic Institute, consumption should bounce back next year, as should investments which will see an influx of funds from the new EU perspective and the National Recovery Plan (KPO).
“The latest Central Statistical Office (GUS) data has taken a negative turn. The decline in sales is definitely not something we expected, especially as we observe on one hand a higher growth in wages, even after adjusting for inflation, and on the other hand, the economy is accelerating after the slowdown in 2023. September was unique in this regard. The October figures may not be the strongest, but this trend seems to be short-lived,” said Dr. Jakub Rybacki, head of the Macroeconomics Team at the Polish Economic Institute, to the Newseria Biznes information agency. He further explained that most surveys indicate that consumers are still relatively positive about their financial situation and are inclined to make significant purchases.
At the beginning of the year, economists expected consumption to be the driving force of the Polish economy. However, the dynamics of the growth of retail sales have turned out to be lower than forecasted for several months. The real surprise came in October, when the Central Statistical Office published data for September. To the disappointment of observers, retail sales unexpectedly fell by 3% instead of growing year-on-year by 2.1% (at constant prices). This was the first decline in 2024 on an annual basis.
In 2023, the Polish economy grew by a modest 0.1%. The first and second quarters of 2024 were significantly better, bringing growth of 2% and 3.2%, respectively. Economists expect that the country’s GDP will increase by about 3% in the entire year, although rather below this level due to the disappointment of consumers. Other components of GDP are also not impressive.
“The industry is currently a weak link in the Polish economy for several reasons. We certainly feel what is happening in the German economy, where we are dealing with real stagnation, which affects Polish chemical industries, energy-intensive sectors, and is starting to hit the automotive sector,” said Dr. Jakub Rybacki.
Sentiments in Polish industry, measured by the forward-looking PMI index, have been deteriorating since May 2022, when the index remains in the pessimism area, i.e. below 50 points. However, the reading for September was better than forecasted and is already close to the neutral level. This year, actual historical readings indicated an increase five times and a decrease four times after the predominance of negative readings in 2023.
“The Polish economy is likely to grow stably in 2025. On the one hand, consumption will continue to be the main engine of growth, and this will remain stable due to the stable situation in the labour market, rapidly increasing wages. This will stabilize our results,” explains the head of the Macroeconomics Team at the Polish Economic Institute, positively perceiving the macro prospects for Poland in 2025. “On the other hand, the expenditures associated with the National Recovery Plan and cohesion funds in the European Union this year will greatly help. Their use has so far been moderate due to the transition periods between two budgetary foundations and the slow development of the KPO, but there should be an impulse next year.”
