The growth of Poland’s GDP in 2024 will amount to 2.6% – according to PIE’s forecast

Published: 18/06/2024

The Polish economy is emerging from a slowdown. GDP growth in 2024 will be 2.6 percent, and in 2025 – 4.1 percent. Inflation in those years will be 3.6 percent and 4.6 percent, respectively. The unemployment rate will remain one of the lowest in the entire European Union. By the end of 2024, the registered unemployment rate will be 5.3 percent. Also, wage growth in 2024 will maintain a double-digit pace – averaging 12.3 percent. These conclusions come from the “PEI Economic Review: Spring 2024” report published by the Polish Economic Institute.

Inflation relatively low, but still above the NBP target

The beginning of the year brought positive surprises – in March, the pace of price growth was lower than the NBP target (flash estimate 1.9 percent y/y). This sharp decline had several sources: on the one hand, the rate of food price growth fell sharply, on the other hand, core inflation. However, the coming months are expected to bring a renewed increase in inflation – in April-May, the restoration of the standard VAT rate on food will raise it by 0.8 percentage points, and the index will also increase after excluding tax changes. As a result, throughout the second quarter, CPI will hover close to 3.0 percent. Inflation will also increase in the second half of the year – the results will be close to 4.0-4.5 percent, which will be the result of a partial thaw in energy prices and a slight increase in core inflation due to wage pressure and the lack of favorable base effects. In the fourth quarter of 2024, prices in this group will likely rise again at a pace close to 5.0 percent. According to PIE forecasts, inflation will remain above the NBP target in 2025, averaging 4.6 percent for the year.

Still low unemployment compared to EU countries

The unemployment rate in Poland remains low compared to other EU countries. The increase in the rate to 5.4 percent was seasonal in nature and was related to a decrease in labor demand in certain sectors during the winter period. This is a better result than at the beginning of 2023 and significantly better than in other European countries.

“Eurostat data from January 2024 show that the unemployment rate, estimated based on survey research, was 2.9 percent, which is the second-best result in the European Union after Malta. The weak economic activity in 2023 only slightly affected the labor market. Reduced employment in the business sector did not lead to a significant increase in the unemployment rate. In February 2024, it stood at 5.4 percent and still remains at a historically low level. With the economic rebound in the country, labor shortages may become a challenge again,” indicates Marcin Klucznik, an advisor from the PIE macroeconomics team.

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The Polish Economic Institute is a public economic think tank dating back to 1928. Its research primarily spans macroeconomics, energy and climate, foreign trade, economic foresight, the digital economy and behavioural economics. The Institute provides reports, analyses, and recommendations for key areas of the economy and social life in Poland, taking into account the international situation.

Media contact: Ewa Balicka-Sawiak Press Officer M: +48 727 427 918 E: ewa.balicka@pie.net.pl