The European Commission assumes that Poland’s GDP growth in 2022 will reach 4.0%, in 2023 it will slow to 0.7%, and in 2024 it will reach 2.6%. – Results of the European Commission’s autumn forecast, presented on Friday. In 2021, Poland’s GDP increased by 6.8%.
In its July forecast, the European Commission expected Poland’s GDP to rise to 5.2% in 2022, and to 1.5% in 2023.
The Polish economy is slowing down
The European Commission estimates that economic growth in Poland will remain strong in 2022, although a significant decline in inventories and investment slowed GDP in the second quarter. Data shows that the Polish economy maintained its robust pace in the third quarter, led by industrial production and retail sales. As a result, the second half of the year, despite the decline in sentiment indicators, will show relatively good economic results, which will lead to the growth of GDP in Poland at the level of 4.0% over the year.
However, Poland’s GDP growth is expected to slow significantly in 2023 and 2024with the index declining in early 2023. The main factor behind the deterioration in the coming quarters will be the inventory reversal. Weak sentiment, rising cost pressures and rising financing costs will weigh on private investment growth, Especially in construction. On the other hand, spending on public defense and government investment should offset the decline in investment spending by the private sector, which will lead to total investment spending in 2023 to be positive.
despite of high inflationPrivate consumption will remain high thanks to large subsidy policies, low unemployment and an influx of immigrants from Ukraine.
The autumn forecast of the European Commission for the entire European Union assumes that in 2022 the EU’s GDP will increase by 3.3%, in 2023 by 0.3%, and in 2024 by 1.6%.
The European Commission expects that employment growth in Poland in 2022 will reach 1.4%, in 2023 it will be 0.1%, and in 2024 employment in Poland will increase by 0.3%.
In turn, the unemployment rate in Poland in 2022 will decrease to 2.7%. From 3.4 percent last year. According to forecasts of the European Commission, the unemployment rate in Poland will rise to 3.0% next year.And in 2024 to 3.1%.
In the opinion of the European Commission Real wages are expected to fall rather than rise in the unemployment rateCompanies are currently reluctant to lay off workers.
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Inflation in Poland
CPI inflation in Poland at the end of 2022 is expected to reach 13.3%. (compared to 5.2% in 2021), in 2023 it will increase to 13.8%, and in 2024 it will decrease to 4.9%. In July, the European Commission projected that inflation in Poland would be 12.2% in 2022, and 9% in 2023.
Forecasts for the entire European Union assume inflation to reach 9.3% in 2022, 7.0% in 2023, and 3.0% in 2024.
In the opinion of the Commission, HICP inflation, which is calculated by Eurostat according to the same methodology for each state in Poland It will peak in early 2023. The coming months may see an increase in its growth due to higher raw material prices, production costs and relatively high demand, allowing enterprises to pass on costs to consumers. In the future, despite the government electricity price freeze, Energy-driven inflation will remain high due to gas prices, Especially in early 2023. In addition, the pressure on prices will result from the expected withdrawal of the government from the lower rates of value-added tax on energy at the beginning of the new year.
As the economic downturn weakens and interest costs rise, inflationary pressures will gradually disappear. As a result, after peaking in early 2023 at around 19%, Inflation will start to fall to 4.3 per cent. at the end of 2024.
The European Commission assumes that in 2022 Poland’s current account balance will reach -2.9 percent. GDP, in 2023 – 2.5% of GDP, and in 2024 – 1.6 percent. Gross domestic product.
The European Commission expects that Poland’s total public debt will reach 51.3% this year. Gross domestic productNext year it will rise to 52.9 percent. GDP, and in 2024 to 54.2 per cent. Gross domestic product.
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