Poland’s GDP will accelerate to 4.2% y-o-y (year-on-year) in 2024 from 0.7% y-o-y last year, forecasts Goldman Sachs, which in its latest analysis projects above-consensus economic activity, below-consensus inflation and falling interest rates for Poland in 2024.

After a weak 2023, Poland’s GDP is expected to grow by an above-consensus 4.2% in 2024 (consensus = 2.8%), as the resistance from restrictive financial conditions and (previously) high commodity price levels fades. Growth accelerated in sequential terms in the second half of 2023 and this momentum appears to have carried over into 2024: our current activity index (CAI) is close to Poland’s potential growth rate (3.4% y/y, according to Goldman Sachs bank’s report ‘CEEMEA Economics Analyst Poland – Assessing Inflation and Fiscal Risks’.

The bank’s economists estimate that the timing of the removal of the zero VAT rate in Q3 this year is likely, while the timing of the removal of the energy price cap is more difficult to predict.

Despite the significant cost to the government of the frozen energy price programme, the removal of the scheme could be delayed until 2025, according to the bank’s analysts.

The analysts stress that “delaying the removal of the energy price cap until next year would increase the likelihood of interest rate cuts by the NBP”.

Goldman Sachs estimates average annual inflation this year at 3.7% compared to 11.4% last year, followed by 4% in 2025 and 2.8% in 2026. The bank forecasts economic activity to accelerate to 5% in 2025 and growth to slow to 3.8% in 2026.

Economists expect a cut in the reference rate to 4% this year from the current level of 5.75%.

Adrian Andrzejewski