Productivity growth in Poland reached 9.6%, surpassing the United States (7.3%) and other Western countries between 2019 and 2024, according to EY analysis. The most significant acceleration in recent years has been observed in the agriculture, forestry, and fishing sector (a 37.1% increase) and the real estate market (35%). EY predicts that productivity in Poland will continue to rise until 2027, partly due to advancements in Generative Artificial Intelligence (GenAI).
Productivity Trends: Poland vs. Other Countries
EY analyzed productivity (measured as GDP per hour worked) between 2015 and 2024, with a focus on the period between Q4 2019 and Q2 2024. Despite an initial decline during the pandemic, Poland’s productivity grew by 9.6% over the entire period. By comparison, productivity in the United States increased by 7.3%.
Poland also outperformed Western European countries. In Germany, productivity increased by just 0.7%, in the UK by 2%, while in France, it declined by 1.5%. The highest productivity growth was observed in Malta (18.7%) and Slovakia (12.3%).
Reasons Behind Poland’s Productivity Surge
Poland’s productivity growth can largely be attributed to the convergence process, often referred to as “catching up with Western Europe.” After the political transition, Poland had relatively low capital resources compared to countries like Germany or France. However, work efficiency has been increasing significantly, largely due to the adoption of Western technologies.
Additionally, Central and Eastern Europe (CEE) experienced the most substantial growth in Total Factor Productivity (TFP) across Europe, the Middle East, and Central Asia (EMEA), maintaining strong performance even amid slowdowns following the global financial crisis.
“In Poland, capital accumulation is growing relatively quickly, even with a relatively low investment rate. I expect further accumulation, as our absolute capital level is still significantly lower than in Western European countries. Similar patterns can be observed in other CEE countries, which is why we see the highest productivity growth in Lithuania, Slovakia, and Bulgaria, while France, Germany, and Italy struggle with stagnation and declines,” says Marek Rozkrut, Partner at EY, Head of Economic Analysis, and Chief Economist for Europe and Central Asia.
Which Sectors in Poland Are Experiencing the Fastest Productivity Growth?
Between 2019 and 2024, Poland saw the highest GDP per hour worked increase in agriculture, forestry, and fishing (37.1%, compared to 9.1% between 2015 and 2019). This is due to the decline in the number of small, low-yield farms. The real estate sector also showed significant growth, with productivity increasing by 35% between 2019 and 2024, slightly slowing down compared to the 39.8% rise between 2015 and 2019.
Growth was also observed in the manufacturing sector (11% in 2015-2019 and 12% in 2019-2024) and construction, which rebounded significantly after a previous decline (-12.5% in 2015-2019, +13.8% in 2019-2024).
“Productivity growth is broad-based across nearly all analyzed industries. Although growth rates vary, no single sector is solely responsible for the overall increase,” says Maciej Stefański, Senior Economist at EY’s Economic Analysis Team.
However, some sectors experienced a slowdown. The ICT sector (Information and Communication Technology) saw its productivity growth drop from 17.3% in 2015-2019 to just 1.7% in 2019-2024. Other industries showing a decline in growth include finance (from 46.3% to 4.4%), professional services (from 18.5% to 1.3%), public services (from 8.8% to 6.1%), and trade, transport, accommodation, and food services (from 15.9% to 10.5%). The entertainment sector was the only industry to record a decline, with a 16% drop in productivity from 2019 to 2024.
“The ICT sector is one of the fastest-growing industries in Poland. However, the slowdown in productivity growth suggests that expansion is happening extensively through new hiring rather than by increasing workforce efficiency. Factors such as a shortage of qualified specialists, the shift to remote and hybrid work, and reduced overtime may be contributing to lower productivity gains,” explains Maciej Stefański.
Positive Outlook for the Future
EY analysts predict that Poland’s productivity will continue to grow at a relatively fast pace at least until 2027. The primary driver of this growth will be continued capital accumulation. This will not only be due to the ongoing convergence process but also an improvement in Poland’s cyclical position relative to its production potential.
“We forecast that productivity growth in Poland over the next 3.5 years will be similar to or slightly faster than in the past 4.5 years, implying a slight acceleration in annual terms. Unfavorable demographics will pose challenges to growth through workforce expansion, necessitating greater efficiency gains. AI will also contribute to increased productivity, although our estimates are more conservative compared to some market projections. If investment levels could be increased, productivity growth could be even higher,” says Marek Rozkrut.
GenAI and Productivity in Poland: Is AI the Key to Success?
EY’s conservative estimates suggest that AI’s impact on productivity will be limited over the next decade. AI is expected to boost Total Factor Productivity by 0.9% in Western Europe, 0.6% in Southern Europe, 0.4% in the Middle East and North Africa (MENA), 0.3% in Central and Eastern Europe, and 0.05% in Sub-Saharan Africa. However, if GenAI adoption accelerates, these figures could double compared to the baseline scenario.
For Poland, it is important to consider that the CEE region is export-oriented and could benefit from increased external demand from Western Europe, where AI adoption is occurring at a relatively fast pace. This external demand could lead to an additional GDP boost of 1.0% for Central and Eastern Europe, exceeding the direct combined impact of TFP and investment, which is estimated at 0.6%.
“Although Poland has slightly more potential to boost investment and TFP through AI compared to the CEE average, its impact on GDP, inflation, and interest rates is somewhat weaker than in the region overall. This is because Poland’s economy is slightly less open than some neighboring countries, meaning that the increase in demand from Western Europe due to AI implementation will have a slightly weaker impact on Poland than on the CEE region as a whole,” concludes Marek Rozkrut.
