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37.965 million
690.68 billion
5.1 %
18343 USD
306170 km²
1.4 Child
2.9 %
14.4 %
Over the last decade, Poland experienced a period of strong catch-up growth, driven mainly by foreign direct investment, the EU funding, increased labor force participation, and productivity improvements, which helped sustain export competitiveness and sales of industrial goods. Among the EU’s eastern European members, Poland made significant progress in closing the income gap with Western Europe, owing to its well-educated workforce, proximity to the German market, and large domestic market that countered the impact of external shocks on growth. However, the country’s political situation has become more unstable due to the government’s attempts to reshape the post-communist political system. It is unlikely that these efforts to succeed in the long term, but if they do, they could significantly impair long-term investment and growth rates by damaging the legal and justice system. Although accession to the EU entrenched private ownership and competitive markets, levels of business regulation remain high, and some government and legal institutions are ineffective.
Despite improvements in life expectancy and a possible return of some Poles from the UK, a broad decline in birth rates and a policy shift towards reducing the statutory retirement age will diminish the working-age population. Although sentiment towards labor participation and pension reform is likely to adapt over time.
As an open economy, Poland benefits from trade liberalization, but growth prospects could weaken if global protectionism intensifies. On the other hand, Poland could benefit if Western European firms accelerate nearshoring of manufacturing in response. The EU has adopted a new mechanism for screening strategic investments, including restrictions on foreign acquisitions from third countries like China. Continued tensions between the US and China may lead to the bifurcation of global trade and the introduction of tariffs and other restrictive measures in various sectors. While barriers to trade in goods within the EU are being eliminated, Poland needs to move production up the value chain to minimize competition from emerging markets, which necessitates overcoming low innovation and research and development spending.
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The latest GDP update was in October 2023, updating the data on the contribution of GDP output in various sectors for the year 2022, as a proportion of the total GDP. The data is sourced from the World Bank, IMF, and local government statistics. Predictions on the sources of GDP contribution are from the EIU.
In the second half year of 2022, positive economic growth was mainly due to the growth of industrial inventories as global supply disruptions eased, enabling factories to catch up with existing production orders. However, the outlook of 2023 is grimmer, with IMF estimated the growth rate to be only 0.5%, as the economy emerges from an anticipated recession. Private consumption will decline sharply as real wages decrease significantly for the second consecutive year. While measures to compensate households for higher energy costs will partly offset the impact on disposable incomes, they will also prolong demand-side inflationary pressures. Fixed investment will contract as companies struggle with rising uncertainty, soaring costs, and the burden of higher interest rates. Export growth will also slow sharply as Poland’s key export markets in the EU, especially Germany, experience full-year contractions. The government is expected to increase spending in an election year, but previous measures to support household incomes during the pandemic and the early stages of the cost-of-living crisis limit its ability to implement fiscal largesse. Poland’s economic performance in 2023 is, therefore, subject to high volatility as falling consumption demand gradually weakens revenue from industrial production and services.
In 2024, growth is projected to strengthen, but it will continue to be constrained by high inflation due to the National Bank of Poland’s dovish outlook. Real wages are likely to remain stagnant, particularly as inflation remains elevated for an extended period, resulting in weak consumption growth. Similarly, investment growth is set to decline amid increased political instability following the election and a still-challenging external environment. The IMF predicted growth to rebound more fully from 2025 as inflation abates, monetary policy loosens, and external markets recover.
Overall, we expect Poland’s economic growth to experience significant challenges over the next few years due to a combination of internal and external factors. While positive growth was observed in the third quarter of 2022, the country is likely to enter a recession in 2023, followed by weak growth in 2024. While some measures are in place to compensate for the effects of rising energy costs, the overall impact on disposable incomes and consumption will remain a constraint on growth. Furthermore, investment growth is expected to be impacted by political instability and rising costs. However, growth is expected to rebound from 2025 as inflation abates and external markets recover, suggesting that Poland’s economic performance will remain volatile over the next few years.
37.965 million
306170 km²
690.68 billion
18343 USD
2.9 %
14.4 %
60 %
1.4 Child
The latest GDP update was in October 2023, updating the data on the contribution of GDP output in various sectors for the year 2022, as a proportion of the total GDP. The data is sourced from the World Bank, IMF, and local government statistics. Predictions on the sources of GDP contribution are from the EIU.
3241 k people
354 k people
479 k people
3366 k people
-3.3 ‰
88.2 ‰
23.3 %
29.6 %
After World War II, Poland was under a Soviet-backed communist regime until the Solidarity trade-union movement emerged in 1980, leading to partly free elections in 1989 and the formation of the first non-communist government in Eastern Europe. Since then, governments composed of parties descended from the Solidarity movement have alternated in power with coalitions led by the former communists, renamed the Democratic Left Alliance. The conservative-nationalist Law and Justice party (PiS) or the liberal, center-right Civic Platform have won elections since 2005, with PiS winning the 2019 parliamentary election and the 2020 presidential election.
Poland is a parliamentary republic with a two-house parliament consisting of the Sejm (lower house) and Senate (upper house), and a directly elected president who can veto legislation. A three-fifths majority in the Sejm is needed to override a presidential veto.
The Law and Justice party (PiS) prioritizes social welfare, economic nationalism, and reducing inequality. Since taking office in 2015, PiS has focused on pro-natalist policies, increasing welfare and the minimum wage, and lowering the pension age. The government is pursuing a “repolonization” program to repatriate ownership of strategic or politically significant industries by fostering their acquisition through state-owned enterprises. The state maintains a significant presence in the economy, with approximately half of the 20 largest companies by market capitalization being state-controlled.
The government’s top priority going into 2023 is to manage the cost-of-living crisis, with a series of support packages aimed at reducing the impact of high energy prices on households and businesses. The most recent measures include one-time payments for heating, price caps for gas, central heating, hot water, and electricity, as well as subsidies to enterprises. The government expects energy companies to have minimal profits in 2023, with taxpayers sharing the fiscal burden. Poland has invested in new LNG facilities and accelerated gas provision from Norway to reduce energy dependence on Russia. However, the country is expected to increase coal production to reduce reliance on Russian gas, despite the government’s climate pledges.
Poland is also shouldering the burden of a refugee crisis, with an estimated 1.5 million Ukrainian refugees having settled in the country. A new law allows refugees to stay for up to three years with access to healthcare, education, and social services. The government and local authorities spent zł 15.9bn in 2022 alone to support Ukrainian refugees, according to the Polish Economic Institute.
-20.77 Billion
- %
-3.7 %
49.1 %
We have consolidated data on Poland’s e-commerce, social media, and insights relate to how customers in Poland make decisions and spend.
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