Poland

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Resilient economy despite external challenges. Debt is rising as deficits are set to remain wide. --Domestic demand will underpin average growth of 3% in 2025 and 2026, while trade-related uncertainty and the weak German economy pose a drag. --We project general government deficits to average 5% of GDP in 2025-2028. As they narrow only gradually, net general government debt is set to increase materially to about 60% by 2028 from 48% in 2024. --Following the presidential elections in May-June, policy direction could become clearer, but polarization could continue to impede effective policymaking. --External demand remains subdued, turning Poland?s current account to a deficit

...We project that Poland's economy will expand by almost 3% on average over 2025-2028. Although we have slightly revised downward our 2025 growth forecast, we expect the Polish economy to remain resilient in the face of external headwinds. Trade disputes will have a limited direct impact on Poland but will weigh on its exports indirectly thorough the already ailing German economy, Poland's key export market. Heightened uncertainty will also likely affect savings and investment decisions. That said, we think that domestic demand will support growth, particularly through investments funded by the EU's Recovery and Resilience Facility (RRF). Poland's resilience reflects its diversified economy and its underlying strengths, such as flexible labor and product markets and an educated workforce. The rapid government debt increase through to 2028 highlights rising fiscal risks. The 2024 general government deficit was at 6.6% of GDP--markedly higher than projected--and we now expect a deficit over...

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