Poland: Economic and Political Overview
In this page: Economic Outline | Political Outline
Poland’s economy has outpaced the EU average in recent years, driven by strong fundamentals and timely macroeconomic policies. Fiscal and monetary support mitigated the impact of the pandemic and Russia’s full-scale invasion of Ukraine in 2022. The IMF estimates that Poland's economic growth accelerated to 2.8% in 2024, driven by strong private consumption from wage growth and lower inflation. However, net exports dragged on growth as rising imports outpaced exports amid weak Euro Area demand. Growth is projected at 3.5% in 2025 and 2026, supported by NGEU fund absorption, but is expected to moderate below 3% in the medium term due to population ageing.
The fiscal deficit is estimated to have widened to 5.9% of GDP in 2024, driven by a moderately expansionary fiscal stance (0.3% of GDP). This was due to permanent increases in public sector wages and social benefits, which outweighed savings from reduced energy support costs. The deficit is expected to remain elevated in 2025 at 5.6% of GDP, partly due to high defence spending. Authorities have announced plans for fiscal consolidation over the medium term, aiming for a deficit of 2.9% of GDP by 2028. The IMF projects that, based on identified measures, the deficit will decline to 3.5% of GDP, with public debt stabilizing around 65% of GDP. Inflation has significantly declined from 2023 but remains above the central bank's target despite a tight policy stance. Core inflation was still high due to strong wage growth in a tight labour market (at 3.8% in 2024, down from 11.4% one year earlier). Both core and headline inflation are expected to peak before mid-2025 and then moderate to around the upper end of the target range of 2.5±1% by the end of 2025. The financial system remains resilient, and private credit is recovering slowly. Capital and liquidity buffers are well above regulatory requirements, and asset quality has improved. Bank profits have risen due to wider net interest margins, with high liquidity keeping deposit rates subdued. Private sector credit has started to recover since bottoming out in mid-2023, partly due to a subsidized mortgage scheme.
The unemployment rate has been structurally low in recent years (around 3%), though around one in four employees have temporary contracts, twice the EU average. The labour market has proved resilient to the crisis, although emerging labour shortages could act as a significant drag on employment growth in the near future. However, employment decreased in the first half of 2024 following the weak economic growth. As a result, the unemployment rate increased to 3.2% in 2024 (from 2.8% the previous year) and should remain stable over the forecast horizon. In 2024, Poland's GDP per capita (PPP) was USD 54,498, 15 % lower than the EU-27 average, though the gap has been narrowing in recent years (IMF data). Finally, there are still large disparities between the east and the west of the country.
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 811.74 | 862.91 | 915.45 | 968.26 | 1,022.52 |
| GDP (Constant Prices, Annual % Change) | 0.2 | 3.0 | 3.5 | 3.3 | 3.1 |
| GDP per Capita (USD) | 22,086 | 23,563 | 25,041 | 26,537 | 28,080 |
| General Government Balance (in % of GDP) | -4.4 | -5.9 | -5.0 | -4.6 | -4.4 |
| General Government Gross Debt (in % of GDP) | 49.6 | 55.5 | 60.0 | 62.9 | 64.4 |
| Inflation Rate (%) | 11.4 | 3.9 | 4.5 | 3.4 | 2.9 |
| Unemployment Rate (% of the Labour Force) | 2.8 | 3.2 | 3.3 | 3.3 | 3.3 |
| Current Account (billions USD) | 12.57 | 7.32 | -0.22 | -4.20 | -5.95 |
| Current Account (in % of GDP) | 1.5 | 0.8 | -0.0 | -0.4 | -0.6 |
Source: IMF – World Economic Outlook Database, Latest data available.
Note : (E) Estimated data
In Poland, agriculture employs 8% of the active population and contributes about 2.7% of GDP (World Bank, latest data available). More than 60% of Poland’s total land area is taken up by farming, and the country is generally self-sufficient in terms of its food supply. The sown area is 11 million ha, the main crops being rye, potatoes, beetroot, wheat and dairy products. Poland also breeds pigs and sheep in livestock farming. The sowing structure is dominated by cereals (65.6% of the total sown area), followed by fodder crops (13.6%) and industrial crops (12.7%). The country is relatively rich in natural resources and the main minerals produced are coal, sulphur, copper, lead and zinc. According to Eurostat, family farms generate more than 80% of the standard output from agriculture in Poland; while around 20,000 farms use organic farming production methods (Statistics Poland – latest data). Polish agriculture has grown more self-sufficient and export-oriented, with added value rising from EUR 7 billion to over EUR 22 billion in two decades. In 2023, its gross value added surged 71%, the EU’s second-highest increase, driven by supply chain disruptions and high food prices.
The industry sector comprises 30.1% of GDP and employs a similar share of the workforce. The World Bank estimates that the manufacturing industry's value-added accounts for 17% of the Polish GDP (latest data available). The country's main industrial sectors are machine manufacturing, telecommunications, environment, transport, construction, industrial food processing and IT. Some of the traditional sectors, such as the steel and shipbuilding industries, have been in decline. The Polish automobile industry is mainly export-oriented and has been highly resistant to the effects of the 2008 economic crisis; however, it has been the worst-hit domestic sector in the coronavirus pandemic (also due to chip shortages). In recent years, the country has diversified its manufacturing industry, developing sectors such as electrical appliances and clothing production. According to the latest yearly data by Statistics Poland, the value of sold production of industrial products decreased by 5.6% y-o-y in 2023 and amounted to PLN 1,775.5 billion.
The tertiary sector represents 57.5% of GDP, employing about 63% of the active population. The sector has been booming in recent years, especially for financial services, logistics, IT and tourism; this one, in particular, has seen impressive growth: after declining due to the COVID-related restrictions, the sector recovered quickly and in 2023 36.2 million tourists were accommodated in tourist accommodation establishments, with 92.8 million overnight stays (+5.8% and +3.2% y-o-y – Statistics Poland). Concerning the banking sector, it is made up of 29 commercial banks (of which 8 are controlled by the State Treasury, accounting for 56.4% of the sector’s total assets), 492 cooperative banks and 34 branches of credit institutions (European Banking Federation).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 7.6 | 29.6 | 62.8 |
| Value Added (in % of GDP) | 2.7 | 30.1 | 57.5 |
| Value Added (Annual % Change) | 14.3 | -0.6 | 1.4 |
Source: World Bank, Latest data available.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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