Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Poland’s economy is set to continue benefiting from European Union funds next year, bolstering its output, even as overall economic activity is projected to decelerate into 2026. This slowdown is partly attributed to weak foreign demand, particularly from Germany, which has negatively impacted net exports and limited Polish GDP growth in the first half of 2025. The nation’s central bank anticipates a decline in both annual average consumer price inflation and core inflation next year, while fiscal policy is identified as a crucial tool for mitigating future economic shocks.
Economic Growth and EU Funding
The influx of EU funds has played a pivotal role in boosting Poland’s economic output, a trend expected to persist into the coming year. Despite this support, projections indicate a broader slowdown in economic activity extending into 2026.
Forecasts suggest that GDP growth in the second half of 2025 will remain consistent with the performance observed in the first half. The continued utilization of EU funds is considered a key factor in mitigating potential downside risks to the growth trajectory.
External Demand and Trade Dynamics
A significant constraint on Polish economic expansion has been weak foreign demand, notably from Germany, a major trading partner. This reduced external appetite contributed negatively to Poland’s net exports during the first half of 2025.
The broader demand outlook remains a critical variable, with its evolution posing additional downside risks to the nation’s economic performance. Poland’s growth prospects are closely tied to the recovery of its key export markets.
Inflation and Monetary Policy
Poland’s central bank projects a notable easing of inflationary pressures in the coming year. Both the annual average consumer price inflation and core inflation are expected to experience a decline.
This anticipated fall in inflation could provide some relief to households and businesses, potentially influencing future monetary policy decisions. The central bank’s forecasts underscore a shift in the inflation landscape.
Fiscal Strategy and Geopolitical Concerns
Fiscal policy is viewed as the primary instrument for the Polish government to counteract economic shocks and maintain stability. However, the precise shape and direction of fiscal policy for 2026 remain a significant area of uncertainty.
Beyond domestic economic considerations, the ongoing Russian aggression against Ukraine continues to be a major concern, casting a shadow over regional stability and economic predictability. This geopolitical factor adds a layer of complexity to Poland’s economic planning.
Outlook
Poland’s economic trajectory will largely depend on the sustained flow of EU funds and the recovery of global demand, particularly from its European partners. While inflation is projected to moderate, the effectiveness of fiscal interventions and the volatile geopolitical situation in Eastern Europe, exacerbated by the conflict in Ukraine, will be crucial determinants of the nation’s future economic stability.
