Poland
The Polish economy recorded growth of 2.8% in 2024, following a period of stagnation in 2023 (0.1%).
March 25th, 2025
Outlook
Forecast | ||||||||||
Average | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | |
GDP growth (%) | 3.5 | 6.2 | 4.5 | -2.0 | 7.0 | 5.6 | 0.1 | 2.8 | 3.6 | 3.3 |
CPI inflation (%)* | 0.3 | 1.2 | 2.1 | 3.6 | 5.2 | 13.2 | 10.8 | 3.7 | 4.5 | 3.4 |
Fiscal balance (% of GDP) | -2.9 | -0.2 | -0.7 | -6.9 | -1.7 | -3.4 | -5.3 | -5.8 | -5.6 | -5.3 |
Public debt (% of GDP) | 52.7 | 48.2 | 45.2 | 56.6 | 53.0 | 48.8 | 49.7 | 54.7 | 58.9 | 62.4 |
Reference rate (%)* | 2.0 | 1.5 | 1.5 | 0.5 | 0.4 | 5.3 | 6.5 | 5.8 | 5.7 | 4.3 |
Exchange rate (PLN/USD)* | 3.6 | 3.6 | 3.8 | 3.9 | 3.9 | 4.5 | 4.2 | 4.0 | 4.2 | 4.2 |
Current balance (% of GDP) | -1.8 | -2.2 | -0.3 | 2.9 | -1.6 | -3.1 | 2.7 | 0.2 | — | — |
External debt (% of GDP) | 70.2 | 62.0 | 58.2 | 58.3 | 53.1 | 53.5 | 50.7 | 46.6 | 46.9 | 45.0 |
Note: * Annual average.
Source: CaixaBank Research, based on data from Eurostat and Refinitiv.
- The Polish economy recorded growth of 2.8% in 2024, following a period of stagnation in 2023 (0.1%). This upturn was the result of strong growth in household consumption, driven by rising wages and an expansionary fiscal policy (the fiscal deficit is estimated to have risen to 5.8% in 2024). In addition to the 1.8 pp of growth fuelled by private consumption, the increase in public expenditure was also significant (1.3 pp) and more than offset the decline in investment and net exports.
- The inflation rate fell more sharply in 2024, standing at 3.7%, down from 10.8% in the previous year, with the slowdown being more pronounced in the first half of the year. However, rising prices of essential household supplies and food fuelled the surge in inflationary pressures in December and January 2025, when the CPI stood at 5.3% year-on-year. We expect this upward price trend to continue in 2025, with inflation rising to 4.5% (0.1 pp higher than widely anticipated), mainly due to two factors. Firstly, the discontinuation of energy support measures, which was postponed from 2024 to the second half of 2025. Indeed, some leading indicators, such as the selling price expectations of firms, picked up in January after months of flatness, with commodity prices expected to be higher. Secondly, the rise in nominal wages, which could lead to an increase in household consumption. As inflation will remain above the Central Bank’s target of 2.5%, we expect monetary policy to remain tight and interest rates, currently at 5.75%, to fall only slightly to around 5.0% in the second half of 2025. However, if price pressures continue and the zloty’s weakness against the euro increases, interest rates may not fall at all.
- Looking at 2025, we expect the Polish economy to continue growing, mainly supported by strong domestic demand. The initial figures for 2025 on industrial production and retail trade support this view. We expect GDP to grow by 3.6% in 2025, 2 tenths of a percentage point higher than the 3.4% that has widely been expected. The risk balance presents a mixed picture. On the one hand, we cannot rule out the possibility of foreign demand remaining weak due to the damage caused by tariff uncertainty (adversely affecting growth and inflation). On the other hand, we see increased defence spending by the EU, and in particular the German government, as an upside risk, as it could revive aggregate demand in Europe, as could the end of the war in Ukraine, if the US reaches a peace agreement with Russia.
