Poland’s economic growth forecast for 2022 has been slashed from 4.7 percent to 3.9 percent by the World Bank as the Russian invasion of Ukraine continues to hit the European and Central Asian economies.
In its report titled War in the Region. Spring 2022, the World Bank also raised its estimate for GDP growth in Poland next year by 0.2 percent to 3.6 percent.
Despite the reduced forecast for 2022, the GDP growth in Poland may be still higher than the Central European average.
“The war in Ukraine and the pandemic once again shows that crisis situations can cause far-reaching economic damage and put us many years back in time in the income value per capita and economic development,” said Asli Demirgüç-Kunt the Chief Economist of the Europe and Central Asia region at the World Bank.
She stressed that the governments of the countries in the region should, before all, strengthen their macroeconomic buffers and improve the credibility of their politics, to reduce the risk of breaking the chains of trade and investments.
“Poland, where almost 60 percent of all refugees fleeing from Ukraine found shelter, can expect considerable increase in the demand for public services and real estate resources, which will induce additional pressure on public finances. On the contrary, positive impulses to the economy in the short term in the wake of the rise of the internal demand can be expected,” the report says.
The World Bank highlighted that the Polish economy recovered from the recession after the Covid-19 pandemic with the highest economic growth since 2007. The easing of coronavirus restrictions, a strong influx of investments and favorable conditions in the employment market caused the economic revival.
“Inflation accelerated significantly, fueled by a rapid rise in commodity prices, as well as continued disruptions in supply chains which led to increased poverty. The war in Ukraine influences the economy through the prices of goods and trade channels, effects of trust and large influx of dispersed Ukrainians,” the report noted.
The Bank foresees an average annual inflation in Poland of 9.6 percent in 2022, 7.5 percent in 2023 and 4 percent in 2024.