Poland’s GDP: What’s happening?

Poland’s GDP has been doing okay lately and is one of the few nations with an unparalleled 25 years of development. They have been rising at a rate of about 4% (just shy of that at 3.8%), with inflation under control. The results and enhanced credit rating have delighted international rating agencies as well.

Poland is the first nation in Eastern Europe to receive the designation of an advanced economy. In fact, many European countries are reluctant to give Poland more influence within the EU. In 2017, Polish stocks performed incredibly well. This is great news.

According to current predictions, Poland will have an annual growth of roughly 3% during the next few decades. Compared to 2% or less for the Eurozone. This will put Poland somewhere around the middle of the twenty-first century. Mazovia is currently around the EU average. Poland’s consistent growth over a protracted time shows the economy is in good condition.

This growth could accelerate, similar to how Ireland unexpectedly became a wealthy country in the 1990s and 2000s. This means it could happen faster. Consider how Portugal, Greece, and southern Italy have struggled to achieve GDP/capita levels. Comparable to those of the “core EU” despite decades of close economic integration. Perhaps it will never happen. It is challenging to make predictions because Poland’s economy expands in line with the EU average. It will eventually lose its competitive advantage of low wages (in comparison to, for example, Germany) and will need to move higher up the value chain to maintain its growth.

Poland’s minimum salary will increase in 2023

According to figures released by the central bank on Tuesday, Poland’s current account deficit in July totaled 1.735 billion euros ($1.77 billion), up from a deficit of 1.468 billion euros in June. A deficit of 1.670 billion euros was predicted by economists surveyed by Reuters for July. Also, keep in mind that one scenario where Poland reaches EU GDP/capita is a bad one: in the future, there may be a serious Eurozone crisis that causes the EU GDP/capita to fall below Poland’s GDP per capita. In actuality, this kind of effect is responsible for a sizable portion of Poland’s “catching up” in the late 2000s and early 2010s.

Prime Minister Mateusz Morawiecki announced on Tuesday that Poland will increase the minimum wage twice in 2019. It will rise by more than originally anticipated as the country gears up for parliamentary elections in 2023 amidst a persistent cost-of-living crisis. Due to rising energy prices as a result of Russia’s invasion of Ukraine, Polish inflation reached its highest level in more than 20 years in August, with prices rising 16.1% year over year.

As a result, the ruling Law and Justice party has experienced a decline in public support. In a news conference, Morawiecki stated, “We have decided… after taking into account various comments that have been made at the Social Dialogue Council over the last many months, to raise the minimum wage more.” It will now be raised to a level of 3,490 zlotys on January 1 and to 3.600 zlotys on July 1. The current minimum wage is 3,010 zlotys ($651.36).

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