Poland’s economy is projected to expand by nearly 4% next year, driven by expected inflows of European Union aid and a reduction in domestic interest rates, Bloomberg reports, citing Finance Minister Andrzej Domanski.
The 2025 view signals an upgrade from the government’s growth forecast of 3.7%. For this year, Domanski said he’s “comfortable” with growth “at around 3%,” compared with a 3.1% target in the budget.
“I expect that 2025 will be the year when the impact of EU recovery funds will be the biggest,” Domanski said. “I’d also assume that monetary policy will be looser — contracts show that the market is pricing in rate cuts for next year.”
While Poland’s central bank has held its benchmark this year at 5.75% and Governor Adam Glapinski has said this position may hold until 2026, other policymakers have signaled they are open to reducing borrowing costs next year. Derivatives used to bet on rate levels show expectations for about 90 basis points in easing over the next 12 months.
For the time being, Domanski said Poland’s $800 billion economy is held back by weak development in the euro region as well as “restrictive monetary policy and uncertainty observed on the markets.”
“Next year, however, growth will be “closer to 4%,” he said.
Domanski expressed confidence that the forecast economic growth will enable Poland to maintain its budget deficit at a manageable level in 2025. He also mentioned that macroeconomic projections for the 2025 fiscal plan, which will incorporate increased defense spending and funds for the construction of Poland’s first nuclear power plant, will be revealed later this month.
