The long-term trend of Poland’s real GDP per capita growth during the transformation period between 1992 and 2021 was 3.5 percent. This period saw considerable deviations from the trend. Major deviations also concerned the past two years, with rates of 5.3 percent in 2022 and 0.3 percent in 2023, averaging 2.75 percent per year.
The stagnation in 2023 was mainly due to a decrease in domestic demand, the most vital part of which is consumer demand. The decrease was primarily caused by a reduction in real wages in response to the tightening of the anti-inflationary policy by the Polish National Bank (RPP) and the government. So, although there was no GDP growth, a relatively rapid drop in inflation did occur.
In 2024, there is expected to be considerable easing of fiscal policy. This easing could slow down the inflation decrease and slightly increase the rate of GDP growth.
Since technologically advanced countries (USA, Germany, Japan) have seen a GDP per capita growth trend of about 1.5 percent over the past 200 years, a key effect of Poland’s transformation has been a significant reduction in the income gap compared to these countries. Poland is still considered a ‘catch-up’ country, but as this international gap decreases, there must also be a decrease in the Polish GDP per capita growth rate. The decrease in the average growth rate between 2022-2023 may already indicate the beginning of this downward trend, although likely only to a small extent.
The coming years will show whether the GDP growth rate will approach 3.5 percent. It will primarily depend on the volume of investments relative to GDP, particularly high-performance foreign investments, and a reduction in the number of employees in small and low-productivity agricultural households.
Stanisław Gomułka, Chief Economist BCC
