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PKO BP SAPoland's GDP growth at 3.5 pct in 2025, PKO BP's forecast maintained (opinion)
The economists at Poland's largest lender by assets PKO BP maintain their forecast that Poland's GDP growth will accelerate to 3.5 percent in 2025, according to the bank's report. In their view, Germany's new fiscal package could boost Poland's economic growth by an average of 0.2 percentage points in the long term, although not yet in 2025.
"We maintain our forecast that GDP growth will accelerate to 3.5 percent in 2025 from less than 3 percent in 2024. The strongest improvement will involve investment, but consumption will remain an important driver of GDP growth," PKO BP experts reiterated.
"The available data for January-February imply that GDP growth in the first quarter of 2025 will be close to that recorded in the fourth quarter of 2024. The solid performance of construction signals an increase in investment, and the somewhat shallower-than-expected decline in the growth of real household wages in January and February improves the outlook for consumption (despite low retail sales in February)," they added.
The economists pointed out that longer-term hopes are brought by increasingly realistic plans for EU investment-friendly measures to develop defence industry capabilities.
"We estimate that Germany's new EUR 500 billion infrastructure and defence spending package could boost Poland's economic growth by an average of 0.2 percentage points in the long term, but this impact may not yet be noticeable in 2025," they assessed.
In the experts' view, in the nearer term, the growth of infrastructure investment and the development of local industry supported by, among other things, the inflow of EU funds under the national recovery plan KPO will be much more important for the domestic economy.
"We currently assume that the peak in spending will be evenly spread over the summer of 2025-2026, which will translate into a more gradual distribution of investment in 2026 than we previously assumed. Transformational needs juxtaposed with improving corporate financial performance should kick-start a revival of private investment, unrelated to EU funds," the economists wrote in the report.
"The only thing missing to complete the picture is a recovery in exports. Despite an improvement in forecasts, growth in trading partners will remain rachitic. In addition, rising tariffs and a strong zloty may have a limiting effect on exports. A recovery in domestic demand will be accompanied by a strong increase in imports. As a result, net exports will subtract around 1 percentage point from GDP growth in 2025," they concluded.
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