Poland’s potential economic growth is projected to slightly surpass 3% in 2025 and 2026, driven primarily by an increased inflow of EU Recovery and Resilience Facility (RRF) funds, according to Milan Trajkovic, Associate Director at Fitch Ratings. However, growth is expected to moderate in the following years due to various structural challenges.

According to Trajkovic, Poland faces medium- and long-term economic challenges, including unfavorable demographics, labor shortages, geopolitical risks, and subdued external demand. The country is also grappling with the financial burden of transitioning to cleaner energy sources, reducing its carbon footprint, and increasing military expenditures. Internal political dynamics and government cohesion will also play a crucial role in shaping future growth prospects.

In December 2024, Fitch revised its nominal GDP growth forecasts for most Central and Eastern European countries, including Poland. The growth forecast for Poland was adjusted downward to 3.4% for 2025 (from a previous estimate of 3.6%) and 3.2% for 2026 (down from 3.4%), largely due to the ongoing economic slowdown in Germany.

Despite these downward revisions, Trajkovic emphasized that the correction for Poland is relatively modest compared to other countries in the region. Poland’s economy remains resilient due to its relatively limited exposure to the German market and the automotive sector. Polish automotive exports to Germany account for less than 10% of total exports, compared to around 15% in neighboring countries. Additionally, the contribution of the automotive industry to Poland’s gross value added stands at below 4%, significantly lower than the nearly 10% seen in some Central and Eastern European countries.

Poland has managed to expand its share in global exports since 2021, increasing by more than 10%, while most other countries in the region have experienced stagnation or decline. This resilience, combined with the expected influx of EUR 20 billion annually from RRF and Cohesion Funds in 2025-2026, is expected to provide substantial support for economic activity.

Poland’s fiscal policy also remains relatively accommodative, with government initiatives such as social welfare programs, pension increases, and public sector wage hikes expected to boost consumption. Furthermore, lower inflation levels anticipated after 2025 are expected to enhance real disposable incomes, further stimulating economic growth.

The International Monetary Fund (IMF) has also provided its own projections, estimating Poland’s potential GDP growth at 3% in 2024 and 2025, with an acceleration to 3.2% in 2026 before slowing to 2.7% by 2029. This marks a slight downward adjustment from previous IMF forecasts, with the organization’s permanent representative for Central, Eastern, and Southeastern Europe, Geoff Gottlieb, stating in October 2024 that Poland’s potential growth is now estimated at just below 3%.

Potential GDP represents the level of economic output that a country can achieve under equilibrium conditions—without inflationary pressures and with full utilization of production capacity and labor resources. However, due to its theoretical nature, potential GDP estimates vary depending on the methodologies used by different institutions.

While Poland’s economic outlook remains positive for the next two years, policymakers and investors will need to navigate structural challenges and evolving global economic conditions to sustain long-term growth.

Source: Fitch Ratings and ISBnews

Colliers predicts that industrial and logistics assets, along with regional office markets in Poland, will be the most attractive investment opportunities in 2025. According to the report “Highlights 2024 & Predictions 2025. CEE-6 Real Estate Market,” regional office markets, unlike Warsaw, will experience a limited supply of new space until 2026, which is expected to drive increased investor interest. The report also notes that alternative investment strategies such as private debt and mezzanine financing will continue to grow, while credit criteria for non-prime assets will gradually ease. Additionally, Poland’s private wealth sector is increasingly focusing on core+ investments, and the upcoming introduction of REIT legislation, scheduled for 2026, is anticipated to enhance market liquidity and diversify the investor base.

The industrial and logistics sector is expected to see further growth this year, although at a slower pace compared to 2024 and significantly lower than in 2023. This trend may lead to a slight compression of vacancy rates, potentially reaching levels of 6-7% in the first half of the year. Stable demand conditions could encourage developers to negotiate rents, particularly for vacant spaces in older, larger facilities.

In the office market, development activity in Warsaw is projected to rise, with an estimated 230,000 square meters of new office space expected to be completed between 2025 and 2026. In contrast, regional office markets will see limited new supply until 2026, with major projects concentrated in city centers and larger-scale developments. Colliers forecasts a stabilization and gradual decline in vacancy rates in the coming quarters, driven by limited new developments and a growing trend of space withdrawals for modernization purposes. High-standard office buildings will remain in high demand, and tenant activity is expected to remain stable, with an increase in lease renegotiations, particularly for larger spaces exceeding 2,500 square meters. While rental prices in major cities such as Warsaw, Kraków, and Wrocław may see slight increases in 2025, they are expected to stabilize as more office space becomes available.

In the retail sector, the market faces challenges due to a lack of large-format retail projects and increasing market saturation. The availability of prime retail space will be a key factor in attracting major tenants, with competition intensifying for top locations in shopping malls. The new supply in the sector is predominantly driven by retail park formats. In 2024, several retail chains, including Kontigo, ESPRIT, and Eastend, closed all their stores, signaling a shift in market dynamics. Rising operating costs are expected to impact retail operations, leading to optimization efforts and potential increases in rents and service charges in line with inflation.

Despite these challenges, Polish retail chains are continuing their expansion into foreign markets. In 2024, Wittchen Group opened stores in Austria and Romania, Ochnik expanded into Slovakia, and CCC Group introduced its HalfPrice brand in Lithuania and Spain. Colliers forecasts further international expansion of Polish retail brands across Europe in the coming year.

According to the Randstad Workmonitor 2025 survey, more than half of Poles (55%) would leave their job if they no longer trusted their boss, with 38% having already made such a decision in the past. These figures surpass the global averages of 52% and 31%, respectively. The survey also reveals that a strong sense of community and freedom of opinion are crucial factors influencing motivation among Polish employees. Seventy-nine percent of respondents stated that they perform better when they feel a sense of belonging with their colleagues, while 55% valued the ability to fully express themselves at work.

The survey, which included responses from 27,000 employees across 34 countries in Europe, Asia-Pacific, and the Americas, highlights the importance of workplace relationships in fostering a sense of belonging. Eighty percent of Polish employees emphasized the significance of daily interactions at work, closely aligning with the global average of 83%. Additionally, 79% reported that good relationships with colleagues enhance their well-being and job performance, although this is slightly lower than the global figures of 85% and 84%. The data also indicates that 65% of Polish employees maintain contact with their colleagues outside of work, compared to 69% globally.

Workplace atmosphere plays a crucial role in employee retention, with 43% of Polish workers stating they would leave their job if the work environment became toxic, a sentiment shared by 44% of respondents worldwide. Furthermore, 34% of Poles would accept lower pay in exchange for having a close-knit group of colleagues, while 30% expressed a desire for more personal fulfillment at work. Employees in Poland highly value their relationships with their superiors, with the majority indicating that a loss of trust in their employer would prompt them to resign. The survey also found that 50% of respondents would have greater trust in their bosses if employment conditions were more personalized, such as through flexible work arrangements or additional benefits, a figure slightly lower than the global average of 56%.

Job stability remains a top priority for employees in Poland, with 87% highlighting its importance, surpassing the global figure of 83%. Salary is also a key concern, with 84% of Polish workers citing it as a critical factor compared to 82% globally. Work-life balance is equally important, with 83% of respondents both in Poland and worldwide recognizing its significance.

The survey also found that a lack of workplace flexibility is a dealbreaker for many Polish employees. Thirty-three percent admitted to resigning recently due to inflexible working conditions, slightly above the global average of 31%. Additionally, 40% of respondents would reject a job offer that does not provide flexible hours, and 32% would decline an offer without remote work options. However, Polish employees appear to be slightly less demanding in this regard than their global counterparts, where 47% and 39% respectively would turn down such offers.

Values alignment with employers also plays a role in employment decisions, with 42% of Poles stating they would not accept a job if the organization’s values did not align with their own, a figure lower than the global average of 48%. Moreover, 43% of Polish respondents indicated they would resign if they disagreed with the views of their organization’s leaders, closely matching the global average of 44%. Interestingly, Polish employees rate their workplace freedom of expression higher than their global peers, with 55% stating they feel they can fully be themselves at work, compared to just 38% globally.

The recent decision by U.S. President Donald Trump to ramp up oil and gas production is expected to increase global supply and subsequently drive down prices, according to Paulina Hennig-Kloska, Poland’s Minister of Climate and Environment. However, she strongly criticized Trump’s move to withdraw the United States from the Paris Climate Agreement, warning of its negative impact on global efforts to combat climate change.

“Increasing gas and oil production will likely lead to a decrease in their global prices. It’s a simple market rule—when more supply enters the market, prices fall. In Poland, we prefer American gas and oil over Russian imports, which should be completely phased out from the European market,” Hennig-Kloska said in an interview with Radio One.

Hennig-Kloska acknowledged that while the energy transition will take years, natural gas is currently viewed as a transitional fuel in Poland’s energy transformation strategy. She stressed that an abundant global supply of American gas could benefit Poland economically, leading to lower energy costs. However, she emphasized that global cooperation is necessary to achieve meaningful reductions in emissions.

“The key is a global approach to emission reductions, not just actions taken in Poland or Europe alone, as these isolated efforts will have limited impact,” she said, highlighting the responsibility of the world’s largest emitters in curbing climate change.

Hennig-Kloska criticized Trump’s decision to abandon the Paris Agreement, calling it a “bad decision for the world,” as climate change is an undeniable reality. She pointed to recent climate-related disasters, citing heatwaves, rising sea levels, drinking water shortages, and extreme weather events observed in Poland, Spain, and Central Europe.

“This year, we’ve experienced unprecedented weather anomalies, including massive storms and floods. The United States will also face its share of climate-related disasters,” she warned.

According to Business Insider Polska, Trump’s withdrawal puts the U.S. in a group with countries such as Iran, Libya, and Yemen—the only nations that have opted out of the 2015 climate accord, which aims to cap global warming at 1.5°C above pre-industrial levels to prevent catastrophic climate impacts.

When asked how Poland can encourage its energy transition, Hennig-Kloska stressed the importance of making the shift “beneficial for citizens and the economy.” She argued that expanding renewable energy sources (RES) leads to lower energy costs and tangible benefits for Polish consumers.

“Transitioning our energy mix from coal to wind and solar power is not only necessary but also profitable. As more renewable energy is integrated into the system, energy prices will decline, benefitting households and businesses alike,” she stated.

Hennig-Kloska reiterated that Poland’s domestic industry is eager for an accelerated transition, as cheaper energy from renewables would strengthen economic competitiveness and drive sustainable growth.

As the global energy landscape shifts, Poland remains committed to advancing its green transformation while navigating the economic implications of U.S. energy policies under the new administration.

Source: MKiŚ and ISBnews

The total debt of Polish pensioners has decreased by PLN 0.9 billion over the past year, reaching PLN 5.65 billion, according to the latest data from the National Debt Register (KRD). Despite the overall reduction, the average debt per senior has risen from PLN 18,800 to PLN 19,000. The number of indebted retirees recorded in the KRD database has also declined, dropping from 349,100 in January 2024 to 296,300 currently.

According to Adam Łącki, President of the National Debt Register, nearly 53,000 pensioners have successfully paid off their arrears, which is a positive signal considering the financial challenges many seniors face. He noted that retirees must carefully manage their limited budgets, which often do not cover their essential needs and living expenses. Łącki also highlighted that pensioners have collectively paid PLN 98 million in bank debts, PLN 15 million for telecommunications services, and almost PLN 5 million for housing rent over the past year. However, outstanding electricity bills have increased by PLN 8.5 million during the same period.

A significant portion of pensioners’ debt, amounting to PLN 3.93 billion, has been taken over by securitization funds that purchased the liabilities from original creditors, primarily banks. Additionally, pensioners owe PLN 1.01 billion to state and local authorities, PLN 489.2 million to financial institutions such as banks, loan providers, and insurers, PLN 77.4 million in unpaid housing rent, PLN 61.4 million to telecommunications and internet providers, and PLN 34.4 million to energy suppliers.

Findings from the survey “Portfolios of Polish Households Under Pressure from Rising Prices,” conducted by KRD in the third quarter of 2024, reveal that older consumers are more likely than younger age groups to prioritize paying bills over discretionary spending when facing financial strain. The study shows that 61% of people aged 55-64 would reduce spending in other areas to cover their bills, while among those aged 65-74, the figure rises to 73%.

Jakub Kostecki, President of debt collection firm Kaczmarski Inkasso, observed that while many seniors worry about their debt, they often struggle to take a flexible approach to financial management. He noted that pensioners tend to experience significant anxiety over their ability to meet financial obligations. However, once they commit to an installment repayment plan, they exhibit remarkable discipline and consistency. Clearing their debts, according to Kostecki, provides a sense of relief and restores their financial dignity.

Data from KRD also indicates that women make up the majority of indebted pensioners, with 155,800 female debtors compared to 140,000 male debtors. However, men account for a larger share of the total debt, owing PLN 2.98 billion compared to PLN 2.67 billion owed by women. Male pensioners also carry a higher average debt, amounting to PLN 21,200 per person, while the average debt among female pensioners stands at PLN 17,100.

The reduction in total pensioner debt indicates progress, but the increase in individual debt levels underscores the ongoing financial pressures retirees face. As Poland’s aging population continues to navigate economic challenges, maintaining financial stability remains a key concern for both individuals and policymakers.

Source: KRD and ISBnews