Poland’s GDP will increase by 3.7 per cent this year and by 3 per cent in 2023, the European Commission (EC) said in its spring forecast on Monday.
The country’s HICP inflation will reach 11.6 per cent on average this year and 7.3 per cent 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 the consumption shortage, the EU body added.
In its previous forecast, released in February, the EC predicted a 5.5 per cent GDP growth for Poland in 2022 and a 4.2 per cent increase in 2023. The HICP inflation was seen at 6.8 per cent in 2022 and 3.8 per cent in 2023.
The Polish general government deficit will rise to 4.0 per cent of GDP this year from 1.9 per cent in 2021 and to 4.4 per cent in 2023, the EC said, arguing that the negative economic consequences of Russia’s aggression against Ukraine will 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 will weigh on the country’s budget, according to the EC.
The general government debt will reach 50.8 per cent of GDP in 2022 and 49.8 per cent in 2023, the EC said.