Poland flag Poland: Economic outline

Economic Outline

Economic Indicators

Poland has emerged as a dynamic market over the past 25 years and has become a major actor within Europe, being the tenth-largest economy in the EU. The country recovered well from the global COVID-19-induced crisis and grew at a strong pace in 2022 (+5.1%). Nevertheless, the economy lost momentum and grew marginally in 2023 (+0.6%), due to falling private consumption and a negative contribution from inventories, whereas net exports contribute positively to growth due to a marked fall in imports. In 2024, GDP growth is expected to pick up reaching 2.3%, with private consumption as the key driver, boosted by higher real wages, increased public social support, and diminishing inflation. A further acceleration is anticipated in 2025, when the sustained expansion of private consumption, the growth of investments, including those funded by the EU, and an uptick in exports should bring the growth rate to 3.4% (IMF).


The general government deficit rose to 4% of GDP in 2023, up from 2.1% the previous year, attributed to higher spending on defence, public sector salaries, healthcare, subsidies to farmers, and augmented social benefits, particularly pension indexation. The net budgetary cost for reducing the impact of high energy prices stood at 0.6% of GDP due to falling commodity prices. Levies on windfall profits of energy producers funded part of the electricity and gas price freeze schemes. Additionally, the slow economic growth hampered the rise in revenues from indirect taxes. In 2024, the general government deficit is predicted to decline to 4.6% of GDP, aided by increased revenues amid the economic recovery. The debt-to-GDP ratio grew modestly in 2023, reaching 49.8% (+0.8% y-o-y). As the deflator effects dissipate, the debt ratio will rise at a faster pace, to 53.9% in 2025, in line with persistent primary fiscal deficits and higher average interest costs. Inflation reached its peak in 2023-H1 and averaged 12% over the year. In 2024, inflation is forecasted to drop to 6.4%, anticipating the conclusion of energy support measures and the zero VAT rate for certain foods. Persistent strong wage growth is expected to maintain elevated price pressures in services across the forecast horizon.

The unemployment rate has been structurally low in recent years (around 3%), though around one in four employees have temporary contracts, twice the EU average. The labour market has proved resilient to the crisis, although emerging labour shortages could act as a significant drag on employment growth in the near future. Despite a slowdown in economic activity in the first half of 2023, employment witnessed growth, with unemployment falling to 2.8%, a historical low. Real wages are expected to surge due to a significant minimum wage hike in 2024, while the unemployment rate remains broadly stable. The GDP per capita (PPP) of Polish citizens was USD 45,538 in 2023, still 20% lower than that of the EU-27 (data IMF). Finally, there are still large disparities between the east and the west of the country.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 690.68842.17880.06928.94986.48
GDP (Constant Prices, Annual % Change) 5.10.62.33.43.2
GDP per Capita (USD) 18,34322,39323,43424,77826,365
General Government Balance (in % of GDP) -2.1-4.0-5.0-5.1-5.3
General Government Gross Debt (in % of GDP) 49.149.852.253.956.0
Inflation Rate (%) n/a12.06.44.53.6
Unemployment Rate (% of the Labour Force) 2.92.82.93.03.0
Current Account (billions USD) -20.778.422.890.64-3.68
Current Account (in % of GDP) -3.01.00.30.1-0.4

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Polish Zloty (PLN) - Average Annual Exchange Rate For 1 GBP 5.324.864.824.755.00

Source: World Bank, 2015

 

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Latest Update: February 2024

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