Economic Analysis

In today's Eyeopener:

- Today, data on GDP growth in 2025
- Economic Sentiment Indicators improved in January
- Late in the European session the zloty weakened, while bond yields edged slightly lower

We end this week with positive news from the Polish economy – in line with our forecast, Poland’s GDP grew by 3.6% in 2025, indicating that growth in the final quarter of the year was close to 4%. The upcoming week will be light on domestic data – on Monday we will see the January PMI reading for Polish manufacturing. On Tuesday the February meeting of the Monetary Policy Council begins, with the decision to be announced on Wednesday afternoon. A day later, as usual, Adam Glapiński will hold a press conference commenting on the Council’s decision. Like much of the market, we expect interest rates to remain unchanged. (...)

Poland’s GDP growth accelerated in 2025 to 3.6%, up from 3.0% in 2024. The acceleration was driven by strong domestic demand, including a 3.7% increase in private consumption and a 4.2% rise in investment. Assuming that GDP growth data for the first three quarters of 2025 were not revised, the full‑year figures suggest that GDP growth in 4Q25 stood in the 3.9–4.2% y/y range. Overall, the data confirm that GDP growth momentum is strengthening and should remain close to 4.0% in 2026, supported by the development of a new investment cycle. The new figures reinforce our view that the MPC will refrain from cutting interest rates at least until March.

Recent positive data from the domestic economy have sparked a wave of optimism about the prospects for economic growth in Poland. For us, this optimism is nothing new. We wrote about the fact that the coming years would be marked by strong investment growth and that 2026 would be better than 2025 in terms of GDP growth before it became trendy. At the same time, it is worth bearing in mind that these will not be easy years, free from uncertainty, and that the acceleration in domestic growth will be moderate rather than spectacular. In our opinion, the increasingly popular slogan ‘GDP at four plus’ will materialise more likely in the form of nominal GDP level exceeding PLN 4 trillion, rather than in the form of average real GDP growth for the entire year above 4% (although this may not be far off) (...)

In September's Rates and FX Outlook:
 

• Poland’s GDP growth failed to accelerate in 2Q16, with investments surprising negatively (-4.9% y/y), and we think that the second half of the year will see no significant improvement in economic growth. Although private consumption is likely to gain strength in the coming quarters, supported by solid labour income and the new child subsidies, it may take time until investments recover, and the positive impact of net exports will be hard to maintain (export growth may decelerate and imports accelerate). We expect a more significant investment pick-up next year, but by then the impact of the 500+ child benefit programme on consumption will be dissipating. Therefore, we forecast that GDP will grow 3.1% in 2016 and 2.9% in 2017.