Poland, like the rest of the European Union, will face an economic slowdown in 2023. A short recession is expected in the first quarter of 2023, with GDP falling by 0.3 %. The Polish economy will return to growth from the second quarter onwards. GDP for the whole of 2023 will be 1.2 % higher than in 2022. The economic slowdown will be accompanied by high inflation, which will reach 13 % annually. These are the forecasts that the Polish Economic Institute (PIE) published in the “PIE Economic Review – Winter 2022”.

GDP growth slowed from 8.5 % in Q1 to 3.6 % in Q3, but this is not the end of the downward trend. Current data show low growth in consumer spending and investment. In addition, GDP growth further relies on stocks. Their reduction by companies and the poor performance of exporters will exacerbate the coming slowdown.

The Polish Economic Institute expects GDP to grow by 1.2 % in 2023, the quarterly results, however, will be strongly differentiated. At the beginning of the year, we will face a recession, with GDP declining by 0.3 %. The economic slowdown also means weak private consumption growth. According to PIE, activity will pick up in the second half of the year due to an economic upturn in the euro area.

The report’s authors forecast that the peak in inflation will occur in February, when it will exceed 20 %. The high figure for this month will be linked to the restoration of standard VAT rates on electricity, fuel and natural gas. From March onwards, inflation will start to fall steadily, but will still be slightly above 8 % by the end of the year. In 2024, prices will rise by an average of 6.4 %. Inflation will also be increased by the withdrawal of the zero VAT rate on food.

Adrian Andrzejewski