Poland destined for soft landing with inflation falling below 10% this year, says head of Polish Development Fund

By Grzegorz Adamczyk
3 Min Read

Inflation should fall below 10 percent within six months, and Poland looks set for a soft landing after a series of crises, said Paweł Borys, the CEO of the Polish Development Fund, while speaking at the EEC Trends conference in Warsaw.

Borys said he believes that the reduction in inflation should help Poland return to growth of 3-4 percent in 2024, with a continuing fall in inflation. 

The CEO, who is one of Prime Minister Mateusz Morawiecki’s most trusted allies, said that the prospects for the Polish economy are sound. He thinks that the climate for investment is therefore positive. He argues that the worst is over for Poland.

“We have gotten through the winter. There was enough coal. There is enough gas. The threat to energy security is therefore now behind us,” he said.

He noted that during the pandemic, the economy had two to three quarters of mild recession; however, the next eight quarters have seen a dynamic rebound. That lasted until the third quarter of last year, and we are now going through three to four quarters of an economic slowdown. The worst of this slowdown should be reached between the first and second quarters of this year when slower growth and high inflation are predicted. 

Borys sees some risks for consumption and household incomes in the short term, but he said he is convinced that there will be no turbulence in the labor market. 

The Polish Development Fund’s CEO did, however, stress that it is important for Poland to have funding from the EU recovery fund. If that money begins to flow into Poland, Borys said that the country’s growth rate should reach 3.5-4 percent rather than the 2.5 percent some economists are predicting if Poland does not receive the promised EU funding. 

According to projections on the basis of which the state budget was constructed, annual inflation for 2023 is projected to be 9.8 percent, while income growth should be 7.8 percent.

Data from the central office of statistics (GUS) shows that inflation for 2022 reached 14.4 percent, making it the highest rise since 1997. In December, the annual inflation rate was 16.6 percent.

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