As it bolts toward the second quarter of 2025, Poland’s economy has never been stronger. This encouraging trend follows a banner year in FY 2022. Just last month, the country reported a stunning 3.2% year-on-year GDP growth in Q1. Plus, it was more than enough to produce a seasonally adjusted quarter-over-quarter growth of 0.7%. Looking ahead, Poland certainly has the potential to continue leading economic growth within the European Union. Our current economic forecasts indicate that quarterly GDP growth will exceed 3% by 2025.
In the first quarter of 2025, Poland’s GDP increased 3.2% on an annual basis, indicative of a stable and favorable economic climate. Indeed, this expansion comes on the heels of robust 3.4% YoY performance in Q4 2024. Similarly, quarter-on-quarter growth took a slight nosedive. That’s a drop from 1.3% in Q4 2024 to just 0.7% in Q1 2025! Growth has moderated somewhat, suggesting some easing after a strong finish to last year. Yet, this decline is not enough to offset the overall positive trend in the right direction.
While the GDP news has all been good, other parts of the economy have taken a beating lately. Construction output in Poland has surprised analysts by declining in the first quarter of 2025, indicating potential strains within this vital sector. This sharp economic reversal has been particularly notable given the buoyant, but shallow, overall economic indicators. It does point out that growth is not occurring evenly across the country.
Retail sales in April, though, offered a glimmer of hope taking a break from the gloom. As the earlier data showed, retail sales absolutely exploded, coming in more than double market consensus forecasts. This spike is evidence that consumer demand is strong. It means that promoting and strengthening domestic consumption is at the core of Poland’s postpandemic recovery and growth strategy.
Poland’s authorities have been notably proactive in using money from the European Union’s recovery grants. They have outspent their PLN20 billion granted total from their whole PLN109 billion (€25 billion) available full grants pot. Pretty shocking, in fact, PLN10 billion will be disbursed at 2025 only. This important down-payment is a clear signal to the world that we are utterly committed to boost economic recovery with infrastructure and development projects.
Poland’s export and domestic demand for durable goods is booming right now. Alarmingly, experts caution that these trends aren’t necessarily permanent. Whether this type of growth is sustainable over the long term will need to be monitored closely as global economic conditions continue to change. Despite these issues bubbling below the surface, Poland’s economic star has shined bright in recent years and established a good economic base for the country going forward.
The current economic climate suggests that, while challenges exist, there are encouraging signs of improvement as Poland navigates through 2025. Preliminary second quarter data are showing signs of economic improvement that could help maintain an upward momentum for the rest of the year.