Poland’s economic outlook over the next several years has made a meteoric recovery. This amendment comes on the heels of the November presidential election, in which Karol Nawrocki prevailed with 51% of the vote. The story behind the government’s growth projections The outlook is optimistic. They’ve lowered their 2025-year growth forecast to 3.2% and have it at 3.1% for 2026. Analysts point to some bright spots. They warn that the first government will easily miss its 2025 target of 6.2% of GDP for the deficit.
The optimism about Poland’s further economic success is fueled in part by the latest data pointing to strong domestic demand and investment activity. In 2025 Q1, domestic demand jumped 4.6% from a year earlier. Over that same time, private consumption increased 2.5%. With consumer activity increasing, the forecast is for growing confidence among Polish citizens. To Nawrocki’s credit, this change was largely influenced by Nawrocki’s election campaign and the subsequent policies.
Investment activity in Poland has bounced back sharply, a strong indication of a positive turn in business sentiment. This surge is a clear signal that companies have decided to start reinvesting in their own operations again after an extended period of limbo. With the government’s continued focus on economy stimulation likely to contribute to this upward trajectory.
So while the growth figures are promising, inflation is still something to be wary of. By 2025, Poland’s average annual inflation will have jumped to 3.6%. It is projected to decline to 2.6% by 2026. With inflation falling further below the 4% level in recent months. This will help relieve upward pressure on consumer prices while increasing consumer purchasing power.
Poland’s 10-year government bond yield has lately shot up to around 5.6%. This change is indicative of the continuing changes taking place in the lending environment. The long-term outlook is a slow, steady drop. We wouldn’t be surprised if by the first half of next year we see it test that 5% threshold. This possible decrease would be a sign of increasing investor confidence in response to the new administration’s approach to key policies.
The EUR/PLN exchange rate has reacted fairly moderately after the recent elections. Now market participants are more than a little bit cautiously optimistic about Poland’s economic future under Nawrocki’s leadership.
Poland’s strong economic fundamentals—sounded macroeconomic indicators and positive, albeit premature, outlook for growth—must be considered against promising fiscal headwinds. The projected deficit of 2025 is alarming to say the least. It sounds alarm bells that the government is likely to break its fiscal targets, which could have serious repercussions for public spending and investment plans in the future.