Poland: Macroeconomic Country Outlook
- GlobalData forecasts Poland’s real GDP to grow by 3.8% in 2022
- Poland was ranked 35th out of 152 nations in the GlobalData Country Risk Index (GCRI) Q2 2022
- According to GlobalData, the services sector of the country contributed 65.9% to the overall GVA in 2021
According to the Heritage Foundation, Index of Economic Freedom (2022), Poland secured 39th rank with score 68.7 among 184 nations. Its overall score is above the world average. Moreover, the country has recorded a slight 0.4-point overall gain of economic freedom since 2017 and remains in the upper reaches of the “Moderately Free” category. Fiscal health, monetary freedom, trade freedom, and investment freedom are strengths of Poland. Additionally, Poland has 46 preferential trade agreements with other countries in force. The trade-weighted average tariff rate (common among EU members) is 2.9 percent with 640 EU-mandated non-tariff measures in force. Foreign and domestic investors are generally treated equally in the country.
Key findings
- Poland’s stance on Russia’s invasion of Ukraine: The Polish government condemned Russia’s invasion of Ukraine. In March 2022, according to the UN Refugee Agency, Poland welcomed more than 2 million refugees from Ukraine. The Polish Center for International Aid Foundation (PCPM) provides help to those in need both in Poland and Ukraine since the first day of invasion. According to the government, Poland provided arms and other military equipment to Ukraine worth at least $1.7 billion, which includes more than 200 T-72 tanks, 18 Krab self-propelled tracked gun-howitzers, and Piorun portable surface-to-air missiles along with humanitarian support to Ukraine.
- The economy is forecast to slow down in 2022: According to GlobalData, as vaccination rates increased and investor confidence solidified, the economy grew by 5.2% in 2021. The real household consumption expenditure also grew by 5.2% in 2021. According to Statistics Poland (GUS), the economy expanded by 5.3% on an annual basis in Q2 2022, compared to a growth rate of 8.5% in Q1 2022. Furthermore, the growth rate is forecast to grow at a slower pace of 3.8% in 2022, as mounting inflationary pressure lowers households’ purchasing power and willingness to spend.
- Poland is ranked 40th out of 190 countries in the World Bank’s doing business ranking for 2020: According to the World Bank, Doing Business Report (2020), Poland’s score was 76.40 out of 100. It takes five procedures to start a business in Poland as compared to the OECD high income average of 4.9 procedures. The country was ranked 37th in terms of getting credit and first in terms of trading across borders (out of 190 nations) in 2020. Poland has one of the best economies and business environments for entrepreneurs in the East European region, according to the World Bank, Doing Business Report (2020).
- Recovery and Resilience Facility: In June 2021, the European Commission approved a grant of EUR23.9 billion ($28.3 billion) and a loan of EUR11.5 million ($13.6 million) under the Recovery and Resilience Facility (RRF). The plan is expected to boost the country’s gross domestic product by 1.1% to 1.8% by 2026. The plan would also introduce up to 105,000 additional jobs in Poland by 2026. The RPF facility allocated EUR420 million ($496.8 million) to digitalize public administration. The plan also includes investments of more than EUR7.5 billion ($8.9 billion) in green and smart mobility. Moreover, EUR3.7 billion ($4.4 billion) for offshore wind energy plants and terminal infrastructure, as well as changes to the regulatory framework, which will facilitate the construction of onshore wind energy plants. The regulation will be completed by August 2026.
- Integration of digital technology: According to the EU, Digital Economy and Society Index (2022), the country allocated funds for the integration of digital technology, which include (i) EUR1.4 billion ($1.7 billion) to support the development of fixed broadband (ii) EUR1.2 billion ($1.4 billion) for the deployment of mobile broadband. Investments made aims to focus on broadband internet access with a capacity of at least 100 Mb/s and possibly increasing it to Gigabit capacity covering 930,000 households and support the roll-out of 5G network through construction of 5G base stations in market failure areas. The project will get operational by 2025.
- Step toward renewable energy in the country: In April 2022, the European Bank for Reconstruction and Development (EBRD) provided a loan of PLN212 million ($54.9 million) to support the construction of a solar farm in Zwartowo, Poland. In June 2022, Polish renewable energy developer Neo Energy Group introduced a 72.6MW wind farm project in the country. The company will make an investment of PLN236 million ($61.1 million), which includes the construction of 33 wind turbines in Czluchow, in northwestern Poland’s Pomeranian Voivodeship after getting operational in Q3 2024. The plant is expected to generate around 230 GWh of electricity annually. In July 2022, EBRD announced to invest PLN80 million ($20.7 million) in green bonds as well as to accelerate the development of renewable energy. The project seeks to drive the country towards net zero carbon emissions by 2050.
Key fundamentals
Sectoral outlook
- Revival of travel and tourism industry: In September 2022, Poland and Egypt held a bilateral consultation session for bilateral cooperation in various fields which includes political and economic, and various aspects of technical and sectoral cooperation, including cultural and tourism cooperation. In August 2022, the country announced to approve a legislation designed to protect Poland's Oder River and to prevent environmental catastrophes. The law would also boost tourism and food businesses in the Oder area of Poland. According to the World Economic Forum, Travel and Tourism Development Index (2021), the country ranked 30th out of 117 nations. GlobalData’s report, Poland Source Tourism Insight, 2022 Update, reveals that outbound travel from Poland is projected to recover to pre-pandemic levels by 2024, with international departures forecast to grow at a compound annual growth rate (CAGR) of 7.9% from 13.2 million projected international departures in 2022, to 18 million by 2025. According to GlobalData, international arrivals to the country was recorded at 8.4 million in 2020 and 7.5 million in 2021. GlobalData forecasts international arrivals to reach 13.7 million in 2022 and 16.4 million in 2023.
- Robust cybersecurity and policy to boost technology of the country: In August 2022, Poland and Ukraine signed an agreement to strengthen cybersecurity collaboration. Both the nations decided to jointly fight cybercrime and share their experience in combating cyber threats. In 2021, under the recovery and resilience plan for Poland (2021–26), the European Commission allocated various amounts to enhance digital sector of the country which include (i) EUR2.6 billion ($673.2 million) to high-speed internet and 5G network deployment in Poland (ii) EUR1.4 billion ($362.5 million) digital infrastructure and equipment for schools, as well as in digital skills of teachers (iii) EUR443 million ($114.7 million) to strengthen the State's cybersecurity capacity (v) 1.2 million laptops, high-speed internet connection and Artificial Intelligence laboratories in order to ensure that all primary and secondary schools across Poland have equal opportunities to benefit from digital technologies in learning.
- Positive outlook for the construction sector: In July 2022, according to a report published by the International Trade Administration, a total of 264 miles of new roads were constructed in Poland in 2021. Additionally, more than 834 miles of roads are under construction in the country along with 158 miles of roads in the tender process. In 2022, the country is expected to complete the construction of 214 miles of new roads, including almost 46 miles of highways and more than 157 miles of express roads. Moreover, in 2021, the government introduced a resolution for the construction of 100 ring roads by 2030 with an investment worth more than $7 billion. Poland’s General Directorate for National Roads and Highways (GDDKiA) launched a project, namely ‘The Safe Road Infrastructure Program 2021–24’ and allocated more than $650 million. Under the National Railway Program (KPK) for the period of 2021–30, the country planned to invest $18.7 billion to improve more than 5,592 miles of railroad tracks in Poland, where the country completed construction worth $2.6 billion by July 2022. According to GlobalData, construction activities is forecast to grow by 2.6% in 2022 and 4.5% in 2023.
GlobalData Country Risk Index (GCRI) – Q2 2022
Poland was ranked 35th out of 152 nations in the GCRI Q2 2022. The country’s risk score is in the low-risk nations band (30–40). Poland’s risk score across the major PESTLE parameters as well as the overall risk score (31.5), were lower than the world average (44.0), and the East-Europe region’s (37.5). The country secured low risk on macroeconomic (25.2), political environment (35.7), technology and infrastructure (35.0) as compared to the World and East-Europe. Poland’s strong democratic framework and its stable macroeconomic condition have made it a favorable destination for investors.
GCRI Methodology
GlobalData’s unique Country Risk Model determines the existing and future level of country risk by assessing various qualitative and quantitative factors. The index is designed to help firms formulate their global business strategies based on historical developments in an economy.
The Country Risk Index incorporates the latest available macroeconomics, political, social, technological, environmental, and legal data from a range of recognized national and international statistical sources and incorporates proprietary data from GlobalData. East Europe nations in this publication include Poland, Moldova, Serbia, Bulgaria, the Czech Republic, Hungary, Romania, Russia, Slovakia, Turkey, Ukraine and Croatia.
About the report
GlobalData Macroeconomic Outlook report is designed to provide detailed macro-economic analysis which will help clients in their business planning, investment and strategic decisions, and analysis. It also provides a quick view of the current situation and the risk score of the country in comparison to region and world based on the proprietary risk framework. The report also highlights key strengths, weaknesses, opportunities, and threats in each of the pillars of PESTLE, economic growth prospects, and key events which can impact the country’s future outlook.
More details: Macroeconomic Outlook Report: Poland
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