Poland will be one of the fastest-growing EU economies in 2026

Poland's economy is likely to remain one of the fastest-growing economies in the European Union in 2026. According to the European Commission's spring forecast, gross domestic product (GDP) will grow by 3.5%. This would put Poland in second place in the EU behind Malta. As the Commission states in its forecast published on May 21, economic growth will weaken slightly compared to the expected 3.6% in 2025. The main driver will initially remain private consumption. For 2026, the strong growth momentum from the previous year is expected to largely offset the negative economic impact of geopolitical tensions in the Middle East. At the same time, growth in public and private consumption is likely to slow, as higher energy prices and lower wage growth will have a negative impact on the development of households' real disposable income. By contrast, investments are likely to make a much stronger contribution to growth. This will be driven by more intensive use of EU funding - particularly in the final year of the Recovery and Resilience Facility - as well as a growing share of components produced in Poland in rising defense spending. However, the Commission believes that net exports will continue to weigh on economic growth. GDP growth is expected to slow to 2.8% in 2027. Although private consumption will remain an important growth driver, it is likely to contribute less to growth than in previous years. Investment and public spending are also expected to slow down as the inflow of EU funds decreases. At the same time, the negative impact of net exports is likely to decrease due to rising exports. Labor market remains robust The situation on the labor market is likely to remain stable. The unemployment rate is expected to remain at around 3%. The demographically induced decline in the labor supply should be partially offset by additional workers from abroad. According to the forecast, nominal wage growth per employee will slow from 8% in 2025 to around 6% in 2027. Inflation and public finances Inflation, as measured by the Harmonized Index of Consumer Prices (HICP), is expected to rise from 3.3% in 2025 to 3.6% in 2026. The main reason for this is higher energy prices. For 2027, the Commission expects a decline to 2.9%. The Polish government deficit rose to 7.3% of GDP in 2025. This is mainly due to higher spending on defense, public sector salaries and social benefits. The deficit is expected to fall to 6.5% of GDP by 2026 and to 6.3% by 2027. At the same time, government debt is expected to rise from 59.7% of GDP in 2025 to 68.3% in 2027. The European Commission points out that a possible extension of government measures to reduce fuel prices and political uncertainties regarding planned tax and revenue reforms pose risks to the budget forecasts. On the other hand, the planned introduction of a special tax for energy producers in 2026 and possible tax increases from 2027 could increase government revenue more than previously expected. The post Poland will be one of the fastest-growing EU economies in 2026 appeared first on ostwirtschaft.de.