Rating agency Standard and Poor’s (S&P) has downgraded Poland’s economic growth forecast to 4% in 2022 from 4.5%.
At the same time, S&P has lowered its forecast regarding Poland’s economic growth in 2023 from 2.1% to 1.2%, the company has said in a report published on September 28.
The downward forecast revision “reflects a larger than expected contraction in Q2, increasing headwinds for private consumption from higher inflation, declining confidence amid worsening geopolitical conditions, and an expected downturn in the eurozone, which is Poland’s largest trading partner,” S&P said.
But Poland’s expansionary fiscal policy, an inflow of Ukrainian refugees and “various government initiatives (such as a minimum wage increase)” are seen as likely to support the domestic consumption and thereby growth in 2023, S&P added
Inflation forecasts, on the other hand, were raised by respective 1.3% and 1.5%, to 13.3% for 2022 and 11.5% for 2023.
The upward revision takes into account global inflationary pressures and recent high CPI readings, S&P said.
At the same time, the agency added that Poland was “less exposed to energy price shocks” due to its smaller dependence on gas in the energy supply mix. Core inflation readings suggest that the current high inflation in Poland may prove more persistent than expected.
According to S&P, risks to the forecast include “the escalation of the Russia-Ukraine conflict and further disruption to European energy supplies.” (The First News/Business World Magazine)