Poland's 2025 GDP growth forecast raised by EBRD to 3.5 pct (chief economist interview)
The European Bank for Reconstruction and Development (EBRD) has raised Poland's economic growth forecasts for 2025-2026 by 0.2 percentage points to 3.5 percent and 3.4 percent, respectively. Poland has a large and diversified economy; it is more resilient to external shocks than smaller countries in the region, chief economist at the EBRD Beata Javorcik told PAP Biznes.
"Poland's economic growth dynamics look very favourable compared to other Central European and Baltic countries. According to our latest forecast, the Polish economy will grow by 3.5 percent in 2025, which is the highest rate in the entire region. We have made a slight upward adjustment of 0.2 percentage points compared to our previous estimates. We also forecast that Poland will have the highest economic growth among the countries in the region in 2026, at 3.4 percent," Javorcik told PAP Biznes.
"Most European countries are feeling the negative impact of the economic slowdown in Germany, while Estonia is particularly affected by the weaker economic situation in the Scandinavian countries. Thanks to its large and diversified economy, Poland is more resilient to external shocks than the smaller countries in the region. The increase in our forecasts is justified, among other things, by the fact that the first half of 2025 turned out to be better than previously assumed," she added.
The EBRD's chief economist pointed out that economic growth in Poland is supported by investments.
"Economic growth is supported by infrastructure investments, which should be even greater next year. This applies to both defence projects, such as the Eastern Shield programme, and investments financed by EU funds. Funds from the national recovery plan KPO must be used by the middle of next year, so there is no room for delays," Javorcik assessed.
"The economic situation in Poland is also driven by the energy transition, i.e. investments in wind farms in the Baltic Sea and in the transmission network, as well as railway investments and Poland's central transportation hub CPK," she added.
According to the chief economist at EBRD, Poland's economic situation is also supported by inflation, which is stabilising at a lower level.
"Economic growth is also supported by inflation stabilising at a lower level, which is falling faster than expected, partly due to the freezing of energy prices until the end of the year. Lower inflation means that we are likely to see further interest rate cuts in the future, which will be a positive stimulus for investment," Beata Javorcik assessed.
"Inflation stabilising at a lower level also supports consumption. Although it seems that households are saving rather than consuming, this is also positive in a sense – these savings will translate into investments in the future. Generally speaking, despite the difficult geopolitical situation, sentiment in the Polish economy is improving," she added.
Among the risks to economic growth, Javorcik mentions geopolitics, a potential economic downturn in Germany and delays in the implementation of investments.
In an interview with PAP Biznes, the chief economist of the EBRD pointed out that in recent years, an increase in public debt has been observed in virtually all countries.
"COVID, the energy shock caused by the war in Ukraine, increased military spending – all of this has led to an increase in public debt in recent years and means that debt is likely to continue to grow in the future. Rising debt is a threat in almost all countries," Javorcik told PAP Biznes.
"In our report, we point out that public debt in the United States is at the level it was at the end of the Second World War – looking at the historical context, this is shocking, because the Second World War was a period of enormous expenditure," she added.
Javorcik pointed out that although reducing public debt is a difficult task, it requires a serious approach, especially in the context of forecasts published by rating agencies.
"Reducing public debt is an extremely difficult task. This was recently demonstrated by the example of France, where an attempt to reduce debt ended in the collapse of the government," she stressed.
"This problem affects most countries and requires a very serious approach, especially in the context of forecasts published by rating agencies. Why? First and foremost, because debt servicing is becoming an increasingly important part of the budget," EBRD chief economist pointed out.
According to Beata Javorcik, external pressure from international institutions can support countries' efforts to reduce debt.
"The light at the end of the tunnel here is action at the European Union level. It is very difficult for governments to convince the electorate to tighten their belts, which is necessary when public debt is rising. So, if we want to reduce debt, external pressure can be helpful here, as those in power can always shift the blame onto international institutions, so to speak. The very fact that such pressure exists is positive," said the economist.
"Of course, we are all aware of the current geopolitical situation, which the European Union is also taking into account. However, it is crucial not to lose sight of the long-term goal of reducing debt in the medium term," she added.
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