The European Financial Congress is forecasting Poland’s GDP growth for this year to be 0.5 percent and 2.8 percent for 2024.
According to the surveyed economists, the rebound in consumption will be stronger than expected half a year ago. Back then, analysts estimated that after a 0.5 percent decline in consumer demand in 2023, there would be a 3 percent increase the following year. Currently, experts believe that this year’s decline will be 0.7 percent, but next year will see an increase of 3.8 percent.
Investment figures are also better than expected. Six months ago, analysts believed that investment would be up by 1.6 percent this year, but current forecasts are now at 7.2 percent. However, expectations are that this will not be sustained in 2024, with the forecast dropping from an increase of 3 percent to 2.4 percent.
Figures for inflation are better than expected six months ago, too. In June, average annual inflation was forecast to be 12.8 percent, but now estimates are at 6.8 percent. For next year, economists forecast annual inflation to reach 5.8 percent, down from the 7.3 percent forecasted six months ago.
However, the Polish Central Bank’s inflation target of 2.5 percent will not be realized next year, nor in 2025, and even in December 2026, inflation is expected to be above 3 percent.
Forecasters expect larger deficits in public finances. In June, that deficit was expected to be at 5 percent of GDP for 2023 and 4 percent for 2024, but now, it is expected to be 5.4 percent this year and 4.9 percent next year. This means that the deficit is unlikely to reach the 3 percent of GDP target set by the EU in the period 2023-2026.
The economists surveyed are concerned that if inflation and high interest rates persist, Poland is in danger of going through a period of stagflation.
In the banking sector, economists continue to believe that foreign-denominated mortgage loans are the main problem for liquidity in the sector. However, they also remain concerned that a mix of an expansive economic policy and a deteriorating state of public finances could hit the country’s financial stability.
