The International Monetary Fund (IMF) has released its "World Economic Outlook" report, revealing significant changes in global economic forecasts. As the world prepares for the IMF spring summit in Washington, Poland is set to be represented by Finance Minister Andrzej Domański. The report indicates that global GDP growth is expected to decline to 2.8 percent, down from the 3.3 percent estimated in January. This downturn reflects broader economic challenges, particularly in the United States and the European Union.
Specifically, the IMF has lowered its GDP forecast for the United States to 1.8 percent, nearly a full percentage point decrease. Meanwhile, the European Union is projected to experience a modest growth rate of 1.4 percent. In contrast, Poland is anticipated to lead the way in the EU with a GDP growth forecast of 3.2 percent for 2025 and 3.1 percent for 2026. This makes Poland's economic outlook particularly noteworthy amidst a backdrop of global economic uncertainty.
Inflation in Poland is expected to average 4.3 percent this year, with unemployment remaining low at around 3 percent. However, the initial forecast for Poland's growth was adjusted down from 3.5 percent to 3.2 percent. While this may seem discouraging at first glance, context is crucial. Poland's projected growth rate of 3.2 percent stands out as the highest in the European Union, especially as other economies face stagnation or decline.
Recent data released on April 22, 2025, provides further insight into Poland's economic landscape. The average salary in March rose by 7.7 percent year-on-year, reaching 9055.92 PLN. However, this increase marks the slowest growth rate in wages since February 2021. Employment figures reveal a slight decrease, with 6 million 444 thousand full-time positions reported, a drop of 0.9 percent. In terms of industrial production, March saw a year-on-year increase of 2.5 percent, though this fell short of economists' expectations of 3.6 percent.
Analysts from Credit Agricole have pointed to a weakening economic situation, citing the latest data as indicative of a gradual decline in wage pressures and slower-than-expected domestic demand recovery. They noted, "March data on industrial and construction production, as well as wage and employment statistics in the corporate sector, indicate a gradually weakening wage pressure and a slower-than-expected recovery in domestic demand. Consequently, we see a clear downside risk for our GDP forecast in Q1 (3.1 percent year-on-year compared to 3.4 percent in Q4 of last year)." This sentiment echoes throughout the financial community, as experts await further data on retail sales and the Purchasing Managers' Index (PMI) for April in the eurozone.
Economists at ING have also weighed in, noting that the cooling labor market could pave the way for interest rate cuts. They remarked, "The slowing growth rate of wages, lower-than-expected core inflation, a weaker US dollar, and relatively low oil prices will all be arguments favoring a cut in NBP interest rates in May." This perspective aligns with the broader market sentiment regarding potential monetary policy adjustments in response to economic indicators.
Moreover, analysts from ING have raised concerns about the base effect influencing industrial data. They cautioned that the relatively high annual growth rate of industrial production in March is largely attributed to a low reference base from the previous year, when production increased by only 4.0 percent year-on-year. They stated, "The relatively high annual growth rate of industrial production in March is mainly due to the low reference base from March of last year, when production increased by only 4.0 percent year-on-year, which may have been linked to lower production activity during Holy Week." This nuance is essential for understanding the current economic climate.
Additionally, the construction sector has shown signs of strain, particularly in infrastructure projects, with a reported decline of 4.9 percent year-on-year after a previous increase of 1.7 percent the month prior. Analysts express concern over mixed signals from the government regarding the initiation of public investment cycles. They noted, "There has been a significant drop in the construction of infrastructure facilities, suggesting a slow absorption of EU funds from cohesion policy and the National Reconstruction Plan."
As the IMF report highlights, the economic slowdown in the United States is largely attributed to the tariff policies of the Trump administration and the uncertainty surrounding his administration's actions. Credit Agricole analysts pointed out, "A risk factor for the expected GDP path in the coming quarters remains the tariff policy of the Trump administration. While Poland's exposure to this risk is relatively small, a significant increase in tariffs in the US and EU leading to a sharp decline in trade between the two economies could warrant a revision of our GDP growth forecast for Poland (3.5 percent)."
Similarly, ING analysts noted that the prospects for production remain uncertain due to the ongoing shifts in US trade policy. They remarked, "While the results of the March logistics managers' survey (PMI) indicate some improvement in new orders, including exports, and a recovery in production, this may be due to stockpiling in the US stimulating production in Europe and Poland. In the 90 days leading up to the implementation of anticipated high US import tariffs, we may witness stockpiling, but longer-term, the specter of trade wars and supply chain disruptions looms large."
Despite these challenges, domestic demand is expected to remain a key driver of Poland’s economic growth. However, analysts have revised their GDP growth forecast for 2025 down from 3.5 percent to 3.2 percent, reflecting rising uncertainties for economic growth in 2026 as well.
In summary, while Poland's economic outlook remains relatively strong compared to its European counterparts, the broader global economic environment poses significant challenges. As the IMF report and subsequent analyses indicate, the interplay of domestic growth factors and international trade dynamics will be crucial in shaping the future trajectory of Poland's economy.
