Recent Economic Developments

The Polish economy has shown resilience thanks to a well-diversified economy, integrated into regional value chains, macroeconomic stability, a sound financial sector, strong domestic labor markets and generous social programs. Over the medium term, continued economic success hinges on sustaining productivity growth and economic competitiveness. A growth model driven by innovation, leveraging Poland’s strengths in clean value-chains and knowledge-based services will require deepening workforce skills and financial markets. The rapidly aging population remains a significant challenge to growth, inclusion and fiscal sustainability. The technological transformation, with the fast evolution of artificial intelligence (AI), creates leapfrogging opportunities but requires adequate planning.

Poland continues to be under the Excessive Deficit Procedure. Under the new EU Fiscal Framework, it has committed to a Medium-Term Fiscal Structural Plan to converge to EU fiscal deficit rules by 2028. Despite the activation in July of the National Escape Clause permitting a temporary deviation of up to 1.5% of GDP in net expenditure growth until 2028, provided the excess is defense-related, the path to sustainability requires more targeted measures.

In 2024, growth reached 2.9%, supported mainly by consumption. While private consumption is expected to remain strong in 2025, public consumption is anticipated to moderate after an exceptionally high contribution in post-electoral year 2024, The implementation of EU-funded projects is supporting an investment revival, although its scale so far remains moderate, as trade uncertainty continues to weigh on private sector investment decisions.

Over the medium term, growth is expected to stabilize close to potential at 3%. The contribution of net exports to growth is expected to remain negative in the medium term. High deficits are driving up public debt, which may exceed 60% of GDP in the coming years.