Poland will have the highest level of inflation among all European Union member states this year but also the joint third highest GDP growth, according to new forecasts from the European Commission. The data also show that Poland had the EU’s joint-highest inflation last year.
Consumer prices will rise 6.8% in Poland in 2022, predicts the commission, well above the EU-wide figure of 3.9%. The next highest rates of inflation are in Lithuania (6.7%) and Slovenia (6.4%), with the lowest levels in Malta (2.1%) Portugal (2.3%) and Denmark (2.5%).
The commission’s figures also indicate that Poland’s level of inflation in 2021, 5.2%, was the bloc’s joint highest, along with Hungary. The rate for the EU as a whole was 2.9%. The forecast for 2023 shows Poland with the EU’s second-highest inflation rate, 3.8%, behind only Bulgaria (3.9%).
In its new GDP forecasts, the commission expects Poland’s economy to grow 5.5% this year. That is lower only than Malta (6.0%) and Spain (5.6%), and at the same level as Ireland, Portugal and Hungary. The EU’s economy as a whole is predicted to grow 4.0%.
The commission also noted that, in the fourth quarter of 2022, Poland recorded the highest GDP growth in the bloc among countries for which data is available. This “confirmed the [Polish] economy’s resilience despite recurring COVID-19 waves and disruptions in supply chains”, it wrote.
“Poland’s economy [is] back to its pre-pandemic output path…with investment and inventories rising strongly amid a revival in manufacturing,” added the commission. It warned, however, that “increasing costs of living will likely erode purchasing power”.
Poland’s recent levels of inflation have been the highest the country has seen in over two decades. In response, the government has introduced a number of measures to soften the blow of rising prices, including reducing or removing VAT on many products as well as a range of other tax cuts and special allowances.
But Poland has also posted strong economic figures, with The Economist recently ranking it as having the sixth strongest economy during the pandemic among 23 rich countries.
Daniel Tilles is editor-in-chief of Notes from Poland. He has written on Polish affairs for a wide range of publications, including Foreign Policy, POLITICO Europe, EUobserver and Dziennik Gazeta Prawna.
