Poland’s GDP is expected to rise to 4.4% and inflation to peak at 11.1% until the end of this year, the Organisation for Economic Cooperation and Development (OECD) said on June 8 in its latest Economic Outlook report.
OECD economists also estimate that next year GDP growth will slow down and inflation will decrease but is likely to remain elevated at the end of 2023.
“After strong GDP growth in the second half of 2021, the war in Ukraine is now having an impact on economic activity. Real GDP is projected to expand by 4.4% in 2022 and by 1.8% in 2023,” they wrote.
According to OECD, consumer price index (CPI) inflation should ease next year but is likely to remain elevated, at around 6.5%.
The authors of the report estimated that higher uncertainty and weaker sentiment among entrepreneurs and consumers would contribute to the slowdown in consumption and investment. However, they pointed out that Ukrainian refugees spending might provide an additional boost to consumption growth.
They also indicated that the influx of refugees to Poland with granted access to the labour market, means an additional 350,000 workers to alleviate skills shortages in some sectors.
“Further escalation of the war would increase uncertainty, exacerbate inflation, and strain public finances. Additional disruptions to energy supplies would hit growth. A persistently tight labour market and continued consumption growth could further push up inflation. On the upside, a quick resolution of the war would increase GDP growth and reduce inflation,” the report reads. (The First News/Business World Magazine)