After rebounding in 2024, Poland’s economy is set to expand at a faster rate in 2025. Growth is forecast to be supported by strong private consumption and investment, while net exports are expected to weigh on the economy. Growth is projected to slow down in 2026. Inflation eased in 2024 but is forecast to pick up temporarily in 2025 due to the unfreezing of energy prices. Following a high general government deficit in 2024, gradual fiscal consolidation is expected over the forecast horizon.
| Indicators | 2024 | 2025 | 2026 |
|---|---|---|---|
| GDP growth (%, yoy) | 3,0 | 3,6 | 3,1 |
| Inflation (%, yoy) | 3,8 | 4,7 | 3,0 |
| Unemployment (%) | 2,9 | 2,8 | 2,7 |
| General government balance (% of GDP) | -5,8 | -5,6 | -5,3 |
| Gross public debt (% of GDP) | 54,7 | 58,9 | 62,4 |
| Current account balance (% of GDP) | 0,6 | 0,4 | 0,3 |
Growth to rebound in 2024 and 2025
The Polish economy rebounded sharply in 2024. Real GDP is expected to pick up from 0.1% in 2023 to 3.0% this year, slightly higher than what had been projected in the Spring Forecast. Private consumption is set to be the main growth driver, supported by rapidly rising wages, increased government spending on support to families, improved consumer sentiment, and receding inflationary pressures. The positive contribution of public consumption is projected to increase while the contribution of investment is expected to fall due to weaker private investment. Net exports are set to contribute negatively to growth, as rising domestic demand is expected to fuel imports amid subdued exports.
In 2025, real GDP is forecast to increase by 3.6%. Private consumption is set to remain the key driver of growth alongside investment, including EU-funded public investment and investment related to reconstruction following the September 2024 floods. The negative contribution from net exports is expected to narrow on account of a rebound in exports as economic growth in key trading partners picks up.
In 2026, growth is projected to moderate to 3.1% as private and public consumption, as well as investment growth, slow down. Risks to the outlook relate mainly to delays in the implementation of public investment.
Labour market to soften
Employment decreased in the first half of 2024 following the weak economic growth in 2023 and is projected to fall by 0.3% for the year as a whole. In 2025 and 2026, it is expected to increase only moderately as the labour force stagnates amid shrinking population of working age. The employment rate of displaced persons from Ukraine is forecast to continue rising over the forecast horizon contributing positively to employment growth. The unemployment rate is set to rise slightly to 2.9% in 2024 and decline in 2025 and 2026. Growth in nominal wages is expected to remain strong and reach 11.4% in 2024 slowing to 5.9% in 2025 and to 5.5% in 2026 reflecting rising labour demand and a historically low unemployment rate in 2026.
Price pressures to ease further
HICP inflation decreased to around 3% in the first half of 2024, rebounded to around 4% in 2024-Q3 and is expected to reach 3.8% on average in 2024. Headline inflation is set to increase temporarily to 4.7% in 2025 due to the unfreezing of energy prices and hikes in excise duties. HICP inflation excluding energy and unprocessed food is projected to reach 4.3% in 2024 and to decline slowly in 2025 and 2026 as disinflation in services proceeds only gradually amid a tight labour market. HICP inflation is forecast to decline to 3.0% in 2026 despite elevated services and food prices growth.
Gradual fiscal consolidation
The general government deficit is projected to increase to 5.8% of GDP in 2024, driven by increased spending on defence (estimated to reach 2.6% of GDP), salary increases in the public sector and new family benefits. Measures to mitigate the social and economic impact of high energy prices, which have been extended until the end of the year, also contribute to the deficit. At the same time, tax revenue, in particular from VAT and corporate income tax, was lower than expected in the first three quarters of the year.
Based on measures included in the 2025 draft budget, the deficit is expected to decrease to 5.6% of GDP in 2025 on the back of a cyclical upturn and of the phase-out of energy-support measures. Expenditure on defence is set to rise further to 2.8% of GDP, according to the government’s multiannual plan to increase defence capability. Tax revenue is expected to increase, among other factors due to the adopted scheme for excise duty rate hikes on tobacco and alcohol products. Rising nominal wages are set to support the growth of personal income tax revenue.
In 2026, pending on the implementation of announced expenditure consolidation measures, the deficit is forecast to decrease to 5.3% of GDP. The growth of general government revenue is expected to slow down, reflecting slower economic growth, while some already adopted revenue-increasing measures are set to take effect in 2026.