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Economic and political overview

Economic Overview

Poland’s economy has outpaced the EU average in recent years, driven by strong fundamentals and timely macroeconomic policies. Fiscal and monetary support mitigated the impact of the pandemic and Russia’s full-scale invasion of Ukraine in 2022. The IMF estimates that Poland's economic growth accelerated to 2.8% in 2024, driven by strong private consumption from wage growth and lower inflation. However, net exports dragged on growth as rising imports outpaced exports amid weak Euro Area demand. Growth is projected at 3.5% in 2025 and 2026, supported by NGEU fund absorption, but is expected to moderate below 3% in the medium term due to population ageing.

The fiscal deficit is estimated to have widened to 5.9% of GDP in 2024, driven by a moderately expansionary fiscal stance (0.3% of GDP). This was due to permanent increases in public sector wages and social benefits, which outweighed savings from reduced energy support costs. The deficit is expected to remain elevated in 2025 at 5.6% of GDP, partly due to high defence spending. Authorities have announced plans for fiscal consolidation over the medium term, aiming for a deficit of 2.9% of GDP by 2028. The IMF projects that, based on identified measures, the deficit will decline to 3.5% of GDP, with public debt stabilizing around 65% of GDP. Inflation has significantly declined from 2023 but remains above the central bank's target despite a tight policy stance. Core inflation was still high due to strong wage growth in a tight labour market (at 3.8% in 2024, down from 11.4% one year earlier). Both core and headline inflation are expected to peak before mid-2025 and then moderate to around the upper end of the target range of 2.5±1% by the end of 2025. The financial system remains resilient, and private credit is recovering slowly. Capital and liquidity buffers are well above regulatory requirements, and asset quality has improved. Bank profits have risen due to wider net interest margins, with high liquidity keeping deposit rates subdued. Private sector credit has started to recover since bottoming out in mid-2023, partly due to a subsidized mortgage scheme.

The unemployment rate has been structurally low in recent years (around 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. However, employment decreased in the first half of 2024 following the weak economic growth. As a result, the unemployment rate increased to 3.2% in 2024 (from 2.8% the previous year) and should remain stable over the forecast horizon. In 2024, Poland's GDP per capita (PPP) was USD 54,498, 15 % lower than the EU-27 average, though the gap has been narrowing in recent years (IMF data).  Finally, there are still large disparities between the east and the west of the country.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 811.74862.91915.45968.261,022.52
GDP (Constant Prices, Annual % Change) 0.23.03.53.33.1
GDP per Capita (USD) 22,08623,56325,04126,53728,080
General Government Balance (in % of GDP) -4.4-5.9-5.0-4.6-4.4
General Government Gross Debt (in % of GDP) 49.655.560.062.964.4
Inflation Rate (%) 11.43.94.53.42.9
Unemployment Rate (% of the Labour Force) 2.83.23.33.33.3
Current Account (billions USD) 12.577.32-0.22-4.20-5.95
Current Account (in % of GDP) 1.50.8-0.0-0.4-0.6

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

In Poland, agriculture employs 8% of the active population and contributes about 2.7% of GDP (World Bank, latest data available). More than 60% of Poland’s total land area is taken up by farming, and the country is generally self-sufficient in terms of its food supply. The sown area is 11 million ha, the main crops being rye, potatoes, beetroot, wheat and dairy products. Poland also breeds pigs and sheep in livestock farming. The sowing structure is dominated by cereals (65.6% of the total sown area), followed by fodder crops (13.6%) and industrial crops (12.7%). The country is relatively rich in natural resources and the main minerals produced are coal, sulphur, copper, lead and zinc. According to Eurostat, family farms generate more than 80% of the standard output from agriculture in Poland; while around 20,000 farms use organic farming production methods (Statistics Poland – latest data). Polish agriculture has grown more self-sufficient and export-oriented, with added value rising from EUR 7 billion to over EUR 22 billion in two decades. In 2023, its gross value added surged 71%, the EU’s second-highest increase, driven by supply chain disruptions and high food prices.

The industry sector comprises 30.1% of GDP and employs a similar share of the workforce. The World Bank estimates that the manufacturing industry's value-added accounts for 17% of the Polish GDP (latest data available). The country's main industrial sectors are machine manufacturing, telecommunications, environment, transport, construction, industrial food processing and IT. Some of the traditional sectors, such as the steel and shipbuilding industries, have been in decline. The Polish automobile industry is mainly export-oriented and has been highly resistant to the effects of the 2008 economic crisis; however, it has been the worst-hit domestic sector in the coronavirus pandemic (also due to chip shortages). In recent years, the country has diversified its manufacturing industry, developing sectors such as electrical appliances and clothing production. According to the latest yearly data by Statistics Poland, the value of sold production of industrial products decreased by 5.6% y-o-y in 2023 and amounted to PLN 1,775.5 billion.

The tertiary sector represents 57.5% of GDP, employing about 63% of the active population. The sector has been booming in recent years, especially for financial services, logistics, IT and tourism; this one, in particular, has seen impressive growth: after declining due to the COVID-related restrictions, the sector recovered quickly and in 2023 36.2 million tourists were accommodated in tourist accommodation establishments, with 92.8 million overnight stays (+5.8% and +3.2% y-o-y – Statistics Poland). Concerning the banking sector, it is made up of 29 commercial banks (of which 8 are controlled by the State Treasury, accounting for 56.4% of the sector’s total assets), 492 cooperative banks and 34 branches of credit institutions (European Banking Federation).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 7.6 29.6 62.8
Value Added (in % of GDP) 2.7 30.1 57.5
Value Added (Annual % Change) 14.3 -0.6 1.4

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Polish Zloty (PLN) - Average Annual Exchange Rate For 1 USD 3.943.783.613.803.90

Source: World Bank - Latest available data.

 

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Foreign Trade

Poland is open to international trade, which represents 124% of its GDP (World Bank, latest data available). The geographical location gives the country strategic importance: situated halfway between Paris and Moscow and between Stockholm and Budapest, Poland 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 (38.3% - data for 2023), manufactured goods (16.6%), food and live animals (11.9%), and chemicals and related products (9.1%). Imports are led by similar product categories: machinery and transport equipment (35%), manufactured goods (15%), chemicals and related products (14%), and food and live animals (7.6%).

In 2023, the main trading partners were Germany (27.9%), the Czech Republic (6.3%), France (6.1%), the United Kingdom (5%), and Italy (4.6%); while the top import origins were Germany (19.8%), China (13.9%), Italy (4.9%), the U.S. (4.4%), and the Netherlands (4.1%). Overall, the EU accounted for 74.7% of Poland’s total exports and 53.9% of its imports (data Statistics Poland).

Since Poland became a member of the European Union, its exports have increased consistently. The country historically had a structurally negative trade balance; nevertheless, since 2013 this trend has reversed: when computing both goods and services, Poland had a positive trade balance estimated at 5.8% of its GDP in 2023 (it was 1.7% one year earlier - World Bank). According to data from WTO, in 2023, the country exported USD 381.5 billion worth of goods (+5.8% year-on-year), whereas imports decreased to USD 370 billion (-2.9% y-o-y). Concerning services, exports reached USD 106.4 billion (+11.6% y-o-y), with imports increasing at a faster pace (+14.5% y-o-y, to USD 65.3 billion).  The latest figures from Statistics Poland show that in January-November 2024 exports totalled PLN 1,394.8 billion and imports PLN 1,388.5 billion, with a trade surplus of PLN 6.4 billion (down from PLN 47.3 billion in 2023). Exports fell 7% year-over-year, while imports declined 4.5%. The EU accounted for 74.2% of exports and 53% of imports.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 265,282261,626342,075381,187370,076
Exports of Goods (million USD) 266,595273,835340,634360,542381,517
Imports of Services (million USD) 43,52240,40449,45257,02765,342
Exports of Services (million USD) 70,46566,61581,13495,379106,480

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 101.699.3110.9123.0110.5
Trade Balance (million USD) -4,8788,111-8,800-23,1935,130
Trade Balance (Including Service) (million USD) 21,96734,08822,45014,62347,774
Imports of Goods and Services (Annual % Change) 3.2-2.516.36.8-1.5
Exports of Goods and Services (Annual % Change) 5.3-1.112.37.43.7
Imports of Goods and Services (in % of GDP) 49.046.853.860.752.4
Exports of Goods and Services (in % of GDP) 52.652.457.062.458.1

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 1.52.34.04.04.0
Volume of imports of goods and services (Annual % change) 3.67.55.44.24.2

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Poland is a member of the following international economic organisations: IMF, European Union, ICC, Central European Initiative (CEI), WTO, OECD, Schengen Convention, among others. For the full list of economic and other international organisations in which participates Poland click here. International organisation membership of Poland is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Poland can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
Germany 27.8%
Czech Republic 6.3%
France 6.2%
United Kingdom 4.9%
Italy 4.6%
See More Countries 50.2%
Main Suppliers
(% of Imports)		 2023
Germany 20.6%
China 12.3%
Italy 5.0%
United States 4.5%
Netherlands 3.9%
See More Countries 53.8%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Andrzej Duda (since 6 August 2015)
Prime Minister: Donald Tusk (since 13 December 2023)
Next Election Dates
Presidential: May 2025
Senate: October 2027
Sejm: October 2027
Current Political Context
After eight years of right-wing governments led by the Eurosceptic Law and Justice Party (PiS), Donald Tusk, a veteran politician who already served as premier in the past, was sworn in as prime minister in December 2023. Following the October 15 elections, President Andrzej Duda tasked outgoing PM Morawiecki with forming a majority in Parliament, despite his recent electoral setback. Morawiecki, rejected by 266 out of 460 MPs, withdrew, leading to the appointment of a new premier-designate through a subsequent vote (248 in favour, 201 against). Within 24 hours, Tusk outlined his government program and secured majority support with the votes of the coalition parties from the October elections: Civic Coalition (157), Third Way Liberals (65), and the Social Democrats of Lewica (26). During its first year in power, the new government sought to tackle issues in key state institutions, such as public media and the judiciary, which had been influenced by the authorities under the previous PiS government.
The opposition Law and Justice party received the most votes in Poland's April municipal elections, but the ruling coalition kept its majority. The Civic Coalition emerged as the largest party in Poland's delegation to the European Parliament in June. These outcomes paved the way for the presidential election in May 2025, which is expected to be a referendum on the policies of the current administration. Polish farmers' demonstrations over the EU Green Deal's expectations and the import of Ukrainian agricultural products also characterized 2024.
Concerning foreign and defence policy, Poland emphasized security and defence readiness while maintaining a firm stance toward Russia. Prime Minister Donald Tusk emphasized how important it is for Europe to increase its military spending on NATO. Additionally, Poland stepped up its attempts to strengthen its borders with Belarus and Russia. With the goal of strengthening defence capabilities along the eastern frontier, the "East Shield" project began construction by the end of 2024. Poland also established a NATO missile installation in the country's northern area.
Main Political Parties
Poland is generally governed by a coalition government. The country's main parties/coalitions are:

- Law & Justice (PiS): right-wing, populist, mildly euro-sceptic and based on a platform of law and order
- Civic Platform (KO): big tent, pro-European
- Poland 2050 (PL2050): founded as a social movement in 2020, centrist
- Polish People's Party (PSL): Christian democratic, centrist, represents farming communities
- New Left (NL): centre-left, formed in 2021 as a merger of the Democratic Left Alliance (SLD) and Spring
- Sovereign Poland (SP): right-wing, formerly known as United Poland, merged with PiS in 2024
- Together Party (Razem): left-wing, socialist, democratic
- Confederation Liberty and Independence (KWiN): far-right, populist
- Modern: liberal, centrist
- New Hope (NN): right wing.

Other parties include The Republicans, Polish Initiative, The Greens, Centre for Poland, Kukiz'15, Yes! For Poland, Confederation of the Polish Crown, and AGROuni.
Executive Power
The President is the head of State, elected by universal suffrage for a five year term. The Prime Minister is the head of the government. He is appointed by the President, an appointment which must be confirmed by the lower house of Parliament (as a general rule, he is the leader of the majority party or coalition), for a four-year term of office (or earlier if the government loses the confidence of the lower house). The Prime Minister holds the executive power, which includes the enforcement of the law and the management of the country's current affairs. The Council of Ministers is proposed by the Prime Minister and approved by the lower house before being appointed by the President.
Legislative Power
The legislative power in Poland is bi-cameral. Parliament is composed of the Senate (upper house, which has 100 seats and whose members are elected by a majority vote in single-member constituencies, for a four-year term of office) and of the Sejm (lower house, which has 460 seats and whose members are elected by proportional representation from multi-member constituencies, for a mandate of four years). The President has the right to veto legislation passed by Parliament, but the Sejm can override the veto with a two-thirds majority.
 

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