Poland: economic outlook for 2023

Sylwia Ziemacka from Poland Weekly talks to Cristina Savescu, Senior Economist for EU countries at the World Bank. “The Polish economy has proven resilient to the multiple global shocks and rebounded more sharply than previously thought from the 2020 recession, despite the war in Ukraine, the energy shock, and tighter global financing conditions. Economic growth is expected to decelerate sharply in Poland in 2023, to below 1 percent, in line with the much weaker growth expected for the euro area, where GDP is expected to record 0 percent growth in 2023, a 1.9 percentage points downward revision from June 2022. The weaker growth projection for Poland in 2023 is the result of several factors. It reflects a marked deceleration in domestic demand due to high inflation that is rapidly eroding households’ purchasing power but also the fading effect of the pent-up demand built during the COVID period and the unwinding of a large inventory cycle that contributed significantly to growth in 2022. The lagged effect of monetary policy tightening, lower demand from key trading partners, and continued negative confidence effects related to the war in Ukraine are also expected to weigh on the growth outturn this year. The National Recovery and Resilience Plan is expected to support public investment, but any delays in EU funds disbursements represent a downside risk to growth,” – said Cristina Savescu.