On November 15, 2024, the European Commission published its Autumn Economic Forecast, presenting an optimistic outlook for Poland’s economy in the coming years. According to the forecast, Poland is set to be one of the fastest-growing economies in the European Union.
GDP Growth Compared to Europe
The Commission projects Poland’s real GDP growth at 3.0% in 2024 and 3.6% in 2025, following a modest growth of 0.1% last year. This positions Poland as a leader among major EU economies in terms of growth dynamics.
Key drivers of this growth include:
- Private consumption, with projected growth of 3.8% in 2024 and 3.6% in 2025.
- Investments, which, although slowing compared to 2023’s impressive 12.6% growth, are expected to grow by 2.3% in 2024 and 6.7% in 2025.
However, net export growth is anticipated to act as a drag on GDP growth due to the global economic situation.
Inflation on the Decline
After record inflation levels (an average of 10.9% in 2023), the EC forecasts a significant slowdown in price growth:
- 3.8% in 2024,
- 4.7% in 2025 (a temporary uptick),
- 3.0% in 2026.
Disinflation is expected to be supported by easing price pressures in the services sector, although wage increases may continue to influence core inflation levels.
Stable Labor Market
Poland’s unemployment rate is expected to remain exceptionally low:
- 2.9% in 2024,
- 2.8% in 2025.
This stands in stark contrast to the EU average of 6.1% and 5.9% for the respective years.
Budget Challenges and Defense Spending
One of the main challenges for Poland’s public finances remains high defense spending, projected at 2.6% of GDP in 2024 and increasing to 2.8% of GDP in 2025. This is a key factor behind the persistently high general government deficit:
- Deficit forecasted at 5.6% of GDP in 2024,
- Expected to decline to 5.3% of GDP by 2026.
Despite these challenges, the EC anticipates fiscal stabilization due to consolidation measures planned for 2025-2026.
Public Debt Rises but Remains Under Control
Despite deficit reduction efforts, general government debt is expected to rise:
- 58.9% of GDP in 2025,
- 62.4% of GDP in 2026.
This increase is primarily driven by defense investments and large public programs.
Conclusion
The European Commission’s forecast paints a picture of a dynamically growing Polish economy that is effectively addressing challenges. Key growth drivers, such as private consumption and investments, are propelling development, while declining inflation and low unemployment further stabilize the economic situation. However, high defense spending and a persistent budget deficit remain challenges requiring effective consolidation measures in the coming years.
