Poland's consumer demand expected to recover in 2025, trend to continue in 2026 - MinFin

"In 2025, private consumption is forecast to increase by 3.3 percent in real terms. In the current year, gross household disposable income will increase by 3.7 percent in real terms, influenced by, among other things, a 3.5 percent increase in real wages and salaries, as well as the introduction of new forms of social support, such as the 'Active Parent' programme, which will be launched in full in 2025, the social pension supplement and the widow's pension," the finance ministry wrote.

The MinFin reported that last year, households focused on rebuilding savings, limiting the growth rate of current consumption despite high growth in gross disposable income.

"As a result, the trend is expected to reverse in the current year and higher incomes will be directed more towards consumption, which will translate into a more pronounced recovery in consumer demand," the ministry assessed.

"In 2026, the above trends are expected to continue and, as the economy continues to prosper and the labour market remains favourable, private consumption growth in 2026 is expected to reach 3.5 percent with real gross household disposable income rising by 3.4 percent," it added.

Poland's Ministry of Finance expects public consumption to grow by 3.2 percent in real terms in 2025 and by 2.4 percent in 2026.

"In the current year, the scenario takes into account the increase in wages and salaries in the state budget sphere in line with the Budget act (i.e. by 5.0 percent. - in the amount of the inflation forecast from the draft Budget act). A similar assumption regarding the valorisation of the aforementioned salaries is made for the following year," the ministry wrote.

"The growth of public consumption will be supported by increasing expenditure on health care. As a result of the projected changes in private and public consumption, total consumption will increase by 3.3 percent this year and by 3.2 percent next year," it added.

The finance pointed out that the investment rate was projected to increase in the coming years, driven by the performance of projects under Poland's national recovery plan KPO , the disbursement of funds from the EU financial perspective for 2021-2027 and carrying out key public and private investments.

In 2025, total investment will increase by 8.9 percent in real terms. In 2026, private investment will be further stimulated by the falling cost of capital as a result of the assumed start of a cycle of interest rate cuts this year, affecting the real economy with a lag of several quarters.

As a result, total investment growth will reach 7.9 percent in 2026.

The scenario also assumes an acceleration of work on infrastructure as part of projects such as Poland's first nuclear power plant and Poland's central transportation hub CPK.

As a result, the investment-to-GDP rate will increase from 16.9 percent in 2024 to 18.5 percent in 2026.

The impact of the change in inventories on GDP growth in the current year will be slightly positive (0.2 percentage points), while next year this category is assumed to have a neutral impact on economic growth.

The finance ministry stressed that the area of foreign trade remained the biggest source of uncertainty.

Exports are forecast to grow by 2.4 percent in real terms in 2025. In 2026, following a gradual improvement in foreign demand, the volume of Polish exports will increase by 2.8 percent.

"With the current scale of uncertainty regarding further developments in international trade as a result of the imposition of tariffs by the US on its trading partners (including the EU) and the possible consequences, the foreign economic situation is the most important risk factor for the presented forecast," Poland's MinFin wrote.

The growth rate of domestic demand in 2025-2026 will be 4.4 percent and 4.1 percent, respectively.

Consequently, imports are projected to grow by 3.8 percent in real terms in 2025 and by 4.0 percent in 2026.

As a result, the contribution of net exports to GDP growth in 2025-2026 will be negative (i.e. imports will outweigh exports) at minus 0.5 percentage points and minus 0.4 percentage points, respectively.

The current account balance will decline to minus 0.7 percent of GDP in 2025 and minus 0.8 percent of GDP in 2026.

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