Economic Success in Poland
At a time of economic gloom across the European Union, Poland has consistently published positive economic figures. With a gross domestic product growth rate of almost 3% in 2024, Poland surpasses the EU’s overall rate of 1% and the rates of France and Germany, which recorded 1.2% and -0.2% respectively.
Positive Growth Projections
The signs are also positive for 2025, with Poland recording 0.8% growth in the second quarter, the fifth best rate in the European Union. Growth of around 3.3% is forecast for this year and a rate of 3% is expected for 2026. Since joining the European Union in 2004, Poland’s average annual GDP growth has been almost 4%, a rate that has accelerated sharply over the past decade.
Key to Success
Poland’s success can be attributed to its successful integration with the European Union, NATO, the Schengen area, and the OECD. Access to European funds has been a key driver of growth, and the country has used these funds to significantly improve its infrastructure. Poland has also created a welcoming business environment and has a generally well-educated workforce.
Economic Importance
Poland’s growing economic importance goes hand in hand with its strategic and geopolitical importance. The country has increased its defense spending, making it number 1 in NATO, with around 4.5% of GDP spent on defense. Much of this spending comes from orders from abroad, but domestic private consumption is the main driver of growth, with low unemployment and real wage growth contributing to a strong domestic market.
Protection from External Shocks
Poland’s relatively closed economy makes it relatively protected from external shocks. When there is a global downturn, smaller, export-oriented economies are often the first to be affected, but Poland’s strong domestic market helps it to weather these storms.
A Model of EU Integration
Poland is a poster child for successful EU integration, having used EU funds to improve its infrastructure and create a welcoming business environment. The country’s size is also a key factor, making it a significant player in the EU.
Political Division
Despite Poland’s economic success, there are potential headwinds, including political division. The country is divided between a right-wing bloc led by the Law and Justice party and a liberal bloc led by Prime Minister Donald Tusk’s Citizens Coalition. This division could put EU funds at risk, particularly if the judiciary continues to clash with Brussels over judicial independence.
Fiscal Challenges
Poland also faces fiscal challenges, with a government deficit of 6.5% of GDP forecast for 2026. The country needs to carry out fiscal consolidation and austerity measures to boost confidence and slow down growth.
A New Economic Powerhouse
Despite these challenges, Poland’s current mood of optimism is justified. The country’s low unemployment rate, consumer confidence, and high productivity all contribute to its economic success. Poland could teach the rest of the EU a lot about economic dynamism and flexibility, and it has the potential to become one of the EU’s most robust and dynamic economies.
