Amidst a backdrop of improving consumer sentiment in Poland, future outlooks are growing bleaker, especially concerning the economic and financial prospects for the coming year. This contrast in sentiment was highlighted by the Central Statistical Office (GUS), which noted a downturn in expectations for the future, even as the current consumer mood showed signs of improvement as of April 2024.
In a revealing interview with Maciej Pawlak for filarybiznesu.pl, Łukasz Kozłowski, chief economist at the Federation of Polish Entrepreneurs and vice-president of the Centre for Legislative Analysis and Economic Policy (CALPE), articulated concerns stemming from anticipated labor market conditions. “There are indications of increased layoffs in certain sectors, alongside some companies scaling down their operations in Poland, more so than in previous years,” Kozłowski explained.
Kozłowski pointed out that while the immediate consumer situation isn’t as dire as feared, with inflation easing and real wage growth maintaining purchasing power, the future holds uncertainties. Notably, concerns loom over the potential end of anti-inflationary measures in July, which could lead to rising energy prices and consequently, higher retail prices.
Recent currency fluctuations also paint a complex picture for Poland’s economy. The Polish złoty has experienced some weakening against the euro, influenced by international geopolitical tensions and the anticipation of policy decisions by the U.S. Federal Reserve. However, Kozłowski remains optimistic about the złoty’s strengthening trajectory in the long run, despite short-term volatilities.
GUS reports a significant rise in consumer prices over the past six years, with an overall increase of 44.5%. Looking forward, Kozłowski remains cautious about predicting too far into the future, emphasizing the unpredictable nature of economic trends. However, he suggests that a return to long-term normalcy could see a decrease in the inflation rate by 2030, assuming effective continuation of current anti-inflation policies.
Moreover, the economic landscape is influenced by external factors, including the economic slowdown in Germany—Poland’s largest trading partner. This has led to a reduction in both export and import volumes. Kozłowski attributes this decline to weak demand abroad and expects the trade balance might improve if the złoty’s strength continues to hold, making imports relatively cheaper.
Despite Germany’s decreasing share in Poland’s foreign trade, Kozłowski believes that Germany will remain a dominant trade partner for the foreseeable future, although there might be shifts in the overall dynamics due to diversification efforts by Polish companies seeking other markets.
As Poland navigates through these economic complexities, the nation’s consumers and policymakers alike will need to stay adaptive and vigilant, facing both immediate challenges and those on the horizon with strategic foresight.