What is the future for the Polish economy? The EC lowers the forecast

The European Commission has revised Poland’s GDP growth forecast to 0.4%. for this year (from 0.5% expected in September this year).

“The Polish economy remained weak in the first half of 2023, but is expected to return to growth in the third quarter and grow by 0.4% in 2023. Growth is limited by declining private consumption and the negative contribution from inventories. Household spending is being maintained at the same level. back due to high inflation and low consumer confidence. The strong negative contribution from inventories follows large increases in previous years as supply chains normalize. Net exports have a positive impact on growth due to a significant drop in imports, while exports in the spring fell less than expected forecast,” we read in the report.

Economic activity is also supported by dynamic investments as business profitability remains high and EU funding peaks in the last year of the programming period, the Commission added.

What about Poland’s GDP?

“GDP growth will accelerate to 2.7% in 2024. Private consumption is expected to be the main driver of growth, supported by rising real wages, additional social support and declining inflation. Net exports and inventories are expected to make a neutral contribution in 2024. Economic growth is expected to accelerate to 3.2% in 2025, supported by further strong private consumption growth, increasing investment, including EU-funded investment, and growing exports,” we read further.

The Commission warned that this forecast was subject to several risks, including persistent inflation due to the easing of monetary policy, a slower take-off of EU-funded investments in the new programming period and delays in the implementation of the recovery and recovery plan resilience.

“Employment rose in 2023-2021, despite a slowdown in economic activity, due to companies’ reluctance to lay off workers. Real wage growth is expected to accelerate, driven by a significant increase in the minimum wage in 2024, with the unemployment rate broadly stable near 3%, the lowest in history. Employment is expected to continue to grow gradually in 2024 and 2025,” the report said.

Source: Do Rzeczy