Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Poland has emerged as a dynamic market over the past 25 years and has become a major actor within Europe, being the tenth-largest economy in the EU. The country recovered well from the global Covid-19-induced crisis, with GDP returning to its pre-pandemic level already in the second quarter of 2021. In 2022, the Polish economy grew an estimated 3.8% with industrial output and retail sales expanding at a solid pace in the first semester of the year. Private consumption also grew, partly boosted by Ukrainian refugee spending and by the recovery from the pandemic, but investment slowed sharply. Economic growth is set to turn negative at the beginning of 2023 due to elevated cost pressures and increasing financing costs. However, private consumption is expected to remain strong and overall growth should pick up over the year, with the IMF expecting GDP growth to enter positive territory (+0.5%). In 2024, the easing of supply bottlenecks should support exports, with growth forecasted at 3.1%.

An expansionary fiscal policy and income tax cuts lead to an increase in the general government deficit in 2022, estimated at 4.2% of GDP (was 3.1% one year earlier). The measures taken to mitigate the impact of rising energy prices included the lowering of VAT rates, cash heating subsidies to households, and a multi-annual support scheme for energy-intensive industries and weighted for around 2.1% of GDP. Despite a multi-annual programme of investment in defence that should increase spending in this area up to 3% of GDP per year, the IMF sees a lower budget deficit in 2023 (3.7% of GDP). The country’s debt-to-GDP ratio is relatively low and was estimated at 48.7% in 2022. It is forecast to decrease further this year (to 45.1%) before picking up again in 2024 (46.2% - IMF). Rising energy prices, growing demand and supply-side bottlenecks have contributed to a steady and robust hike in inflation, which reached a record-high level of 13.8% in 2022. Continued wage growth, the pass-through of elevated energy prices, and significant policy support are set to continue fuelling core inflation, which is projected at 14.3% in 2023, before it decelerates to 4.3% towards the end of 2024.
 
The unemployment rate has been structurally low in recent years (just above 3%), though around one in four employees have temporary contracts, twice the EU average. The labour market has proved resilient to the crisis, although emerging labour shortages could act as a significant drag on employment growth in the near future. In 2022, minimum wage rises and tax changes associated with the “Polish Deal” fiscal stimulus programme added to wage pressures but partly helped households purchasing power. Nevertheless, the European Commission warns that a higher-than-expected increase in inflation arising from supply constraints and labour shortages may weigh on purchasing power and private consumption growth. The average unemployment rate stood at 2.8% in 2022 and is seen to increase only slightly over the forecast horizon, to 3.2% this year and 3.4% in 2024 (IMF). The GDP per capita (PPP) of Polish citizens was USD 42,466 in 2022, still 21.3% lower than that of the EU-27 (data IMF). Finally, there are still large disparities between the east and the west of the country.

Foreign Trade

Poland is open to international trade, which represents 112% of its GDP (World Bank, latest data available). The geographical location gives Poland strategic importance: the country is in fact situated halfway between Paris and Moscow and between Stockholm and Budapest, and it has important ports that are connected to the North Sea through the Baltic Sea. In addition, the country constitutes an excellent place for the export of merchandise to the former Soviet republics. According to figures by Statistics Poland, the country mainly exports machinery and transport equipment (37.1%), manufactured goods (18.3%), food and live animals (10.4%), and chemicals and related products (9.7%). Imports are led by similar product categories: machinery and transport equipment (34.5%), manufactured goods (17.6%), chemicals and related products (14.7%), and food and live animals (6.7%).

In 2021, the main trading partners were Germany (28.8%), the Czech Republic (5.9%), France (5.7%) and the United Kingdom (5%); while the top import origins were Germany (20.9%), China (14.8%), Russia (5.9%), and Italy (5%). Overall, the EU accounts for 75.1% of Poland’s total exports and 54.1% of its imports (data Statistics Poland).

Since Poland became a member of the European Union, its exports have increased by more than 30%. The country historically had a structurally negative trade balance; nevertheless, since 2013 this trend has reversed: when computing both goods and services, in 2021 Poland had a positive trade balance estimated at 3.4% of its GDP (it was 5.7% one year earlier - World Bank). According to data from WTO, in 2021 the country exported USD 337.9 billion worth of goods (+24.6% year-on-year), whereas imports stood at USD 338.3 billion (+31.5% y-o-y). Concerning services, exports stood at USD 80.5 billion (+20.2% y-o-y), with imports increasing at a faster pace (+23% y-o-y, to USD 49.3 billion). The latest figures from Statistics Poland show that foreign trade turnover in January-October 2022 in exports at current prices amounted to USD 302.9 billion (marking an increase of 23.3% on the same period one year earlier), while imports stood at USD 319.6 billion (+31% y-o-y). The overall balance was negative by USD 16.7 billion, while in the same period of 2021 it was positive and amounted to USD 2.1 billion. The EU accounted for 75.8% of exports and 51.3% of imports.

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

The summary of the EU’s economic response to the COVID-19 pandemic is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) in Poland, please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.