Poland’s GDP will increase by 3.7% this year and by 3% in 2023, the European Commission (EC) said in its spring forecast on May 16.
The country’s HICP inflation will reach 11.6% on average this year and by 7.3% in 2023, according to the EC.
The war in Ukraine will have a significant impact on economic activity in Poland in the forecast horizon, mainly due to a deterioration in consumer sentiment, a collapse in trade with Russia and Ukraine and increased inflation, the EC said.
However, an inflow of Ukrainian refugees will compensate for some of the shortfall in consumption, the EU body added.
In its previous forecast, released in February, the EC predicted a 5.5% GDP growth for Poland in 2022 and a 4.2% increase in 2023. The HICP inflation was seen at 6.8% in 2022 and 3.8% in 2023.
The Polish general government deficit will rise to 4% of GDP this year from 1.9% in 2021 and to 4.4% in 2023, the EC said, arguing that negative economic consequences of Russia’s aggression against Ukraine would lead to a deterioration of Poland’s fiscal condition.
The war and the resulting increase in inflation spurred the Polish government to introduce anti-inflation measures and offer aid to Ukrainian refugees, which would weigh on the country’s budget, according to the EC.
The general government debt will reach 50.8% of GDP in 2022 and 49.8% in 2023, the EC said. (The First News/Business World Magazine)