Poland’s economy is continuing to show remarkable strength and resilience, with growth expected to stay above potential until at least 2026. These changes come against the backdrop of recent analyses pointing to the country’s economy continuing to grow despite fiscal headwinds. It’s public consumption, investments & trade driving this growth. All in all, there are signs pointing to a moderation of growth as the economy nears 2027.
Poland’s economic data show stunning growth in the third quarter of this year. In the third quarter 2022, it managed an impressive 3.8%. This extraordinary figure has prompted an increase of 0.7 pp in the 2025 growth revision, up to 3.5%. However, private consumption figures came in a smidge below expectations for this stretch, throwing up red flags regarding the strength of domestic demand.
Overall inflation in Poland has surprised analysts by continuing to move downward the direction, with the flash estimate for November at a benign 2.4%. This decline in inflation gives the National Bank of Poland (NBP) greater latitude with monetary policy. The Monetary Policy Council has responded by cutting interest rates. They signaled that they would go further if pressured by low inflation to go further. Projections show inflation still trending upward relatively steadily as far out as 2026 and 2027, which would affect upcoming monetary policy choices.
Poland’s fiscal situation is still precarious. The latter contributing to the fact that the government is expecting a 2025 deficit of 7% of GDP and down to just 6.8% in 2026. These projections highlight the need for continued fiscal discipline even as we balance the dual challenges posed by a need for greater economic growth and persistent inflation.
Poland’s achievements on stable and inclusive social foundations have gone in parallel with environmental sustainable development goals, receiving global recognition. It is at an important environmental crossroads that will impact its long-term economic prosperity. Tackling these challenges will be key to continuing UP’s progress and the continued well-being of UP’s citizens.
Market analysts note that Poland’s bonds have remained resilient amid these economic fluctuations, largely supported by the dovish monetary policy adopted by the NBP. This resilience speaks to the investor confidence in the country’s economic outlook in spite of challenges already at hand.