Economic growth in Poland is set to remain robust in 2025 and 2026, supported by strong private consumption and investment, while net exports are expected to be a drag on the economy. Inflation eased in 2024 and is forecast to continue moderating in 2025 and 2026. In spite of the deterioration of the general government deficit in 2024, a gradual fiscal consolidation is expected in 2025 and 2026.
| Indicators | 2024 | 2025 | 2026 |
|---|---|---|---|
| GDP growth (%, yoy) | 2,9 | 3,3 | 3,0 |
| Inflation (%, yoy) | 3,7 | 3,6 | 2,8 |
| Unemployment (%) | 2,9 | 2,8 | 2,8 |
| General government balance (% of GDP) | -6,6 | -6,4 | -6,1 |
| Gross public debt (% of GDP) | 55,3 | 58,0 | 65,3 |
| Current account balance (% of GDP) | 0,2 | 1,0 | 0,7 |
Growth to remain robust in 2025 and 2026
In 2024, real GDP grew by 2.9%, broadly in line with the Autumn Forecast. Private consumption supported economic growth, underpinned by rising real wages, increased government spending on benefits for families and receding inflationary pressures. Net exports posed a drag on growth. Total investment declined due to a contraction of construction investment.
In 2025, real GDP is forecast to increase by 3.3%. Private consumption is set to remain the key driver of growth as real disposable income continues to rise robustly. Following the decline in 2024, investment growth is set to pick up strongly mainly due to higher EU-funded public investment. The negative contribution from net exports registered in 2024 is expected to narrow somewhat.
In 2026, economic growth is projected to reach 3%. The contribution from private consumption is set to remain strong, but decrease compared to the previous year as real disposable income growth is projected to slow further. The positive contribution from investment to growth reflects the absorption of EU funds, in particular in the final year of RRF implementation, supporting investment by public and private sector. The negative contribution from net exports is projected to shrink further as exports recover.
Risks to the outlook relate mainly to delays in the implementation of public investment and, on the upside, a faster growth of private consumption given the assumed relatively high savings rate by households as observed in 2024.
Labour market stable
Employment fell in 2024 but is projected to remain broadly stable in 2025 and pick up in 2026. While demand for labour recovers with increasing economic growth, the population of working age is set to continue shrinking due to aging. After having reached a historic high in 2024, the activity rate is projected to continue increasing in 2025 and 2026. The unemployment rate is therefore set to remain broadly stable and reach 2.8% in 2026. Growth in nominal compensation per employee is expected to slow from 12.3% in 2024 to 6.2% in 2025 and to 4.8% in 2026 as inflation moderates and minimum wage increases less than in 2023 and 2024.
Inflation easing slowly
HICP inflation decreased to 3.7% in 2024 and is projected to edge down to 3.6% in 2025. The forecast factors in the legislated changes in energy support in the second half of 2025, but the impact is set to be limited by the recent sharp correction in energy commodity prices. Inflation in services is projected to ease only gradually reflecting continued wage pressures. Headline inflation is forecast to moderate to 2.8% in 2026 benefiting from a projected decrease in energy inflation and weak growth in imported non-energy goods prices.
Gradual fiscal consolidation
The general government deficit turned out at 6.6% of GDP in 2024, compared to the Autumn Forecast’s projection of 5.8% of GDP. The increase was partially due to tax revenues rising well below economic activity. Higher public consumption, including growth of salaries of the public sector employees, as well as higher than estimated defence investments, also contributed to the higher deficit.
In 2025, public spending is set to remain high, driven by increasing defence spending, investments, social benefits and interest expenditure. Total public investment expenditure is expected to exceed 5% of GDP, resulting from accelerated military equipment deliveries and substantial investments in transport and energy infrastructure. The indexation of pensions and new social benefits, including the ‘Active Parent’ programme, social contribution holidays for entrepreneurs and the widow’s pension, are also set to increase government expenditure. Interest expenditure is expected to rise due to growing public debt. Spending on healthcare is also set to increase further in relation to GDP. In contrast, measures announced in Poland's medium-term fiscal-structural plan, such as excise duty hikes and non-indexation of personal income tax brackets, are expected to increase government revenues, supporting a gradual fiscal consolidation. The general government deficit is projected to decrease to 6.4% of GDP in 2025.
In 2026, a continuation of the same trends is expected, before the adoption of the draft budget which may specify further consolidation measures. Expenditures are expected to remain at a high level, driven by broadly similar factors as in 2025. The revenue measures included in the medium-term plan are set to provide for an additional increase in tax revenues. The general government deficit is projected to further decrease to 6.1% of GDP.
The public debt-to-GDP ratio is expected to increase steadily, from 55.3% in 2024 to 58.0% in 2025 and 65.3% in 2026, driven by high deficits and stock-flow adjustments related to defence investments and one-off transfers related to investments financed by RRF loans in 2026.