Poland’s economic surge: Outperforming Europe amidst challenges

Poland is standing out as a beacon of economic growth in the European Union during a period of widespread economic uncertainty. With a forecasted GDP growth of nearly 3% in 2024, Poland surpasses the EU average of 1% and outpaces major economies such as France (1.2%) and Germany (-0.2%). Early 2025 data remains positive, with Poland recording 0.8% growth in Q2, ranking fifth in the EU, and forecasts projecting around 3.3% growth for 2025 and 3% for 2026.

Since joining the EU in 2004, Poland’s average annual GDP growth has been nearly 4%, accelerating over the past decade. Poland’s economic momentum is also reflected in its surging stock market and growing optimism about its future as a dynamic EU economy.

Speaking to DW, Katarzyna Rzentarzewska, chief macro analyst at Erste Group, notes, “Over the last two decades, Poland definitely outperformed… Real GDP doubled. This is something outstanding.”

Poland’s size and economic weight are significant factors. Jacob Funk Kirkegaard of the Peterson Institute highlights, “Poland is big… it actually matters… both politically and as a matter of economic weight.”

With 37 million people, Poland is the EU’s fifth-largest country and ranks inside the world’s top 20 economies by GDP.

Poland’s growth is primarily driven by strong domestic private consumption, supported by low unemployment and real wage increases. 

“It is the pillar of the growth… Poland’s relatively closed economy, consumption remains strong," Rzentarzewska explains.

 his helps shield the economy from external shocks that tend to hit smaller, export-dependent countries first.

Key to Poland’s success has been its integration into the EU, NATO, Schengen, and OECD, as well as strategic use of EU funds for infrastructure development.

Rzentarzewska states, “Poland did it really well… access to European funds was huge—a major contributor to the growth.”

“They have gotten the basics right… eradicated street-level corruption… generated a very welcoming business environment… Poland is a poster child for successful EU integration,” Kirkegaard adds. 

However, Poland faces political challenges, with deep divides between the right-wing Law and Justice (PiS) party and the liberal Civic Coalition led by Prime Minister Donald Tusk. Tusk’s pro-EU stance helped unlock €137 billion in EU funding, contingent on judicial reforms.

Despite political tensions, Rzentarzewska stresses, “Poland is a good example of how you can have progress and dynamic growth under different political parties or orientations.”

While welfare spending and increased defense budgets have bolstered growth, they also contribute to a tight fiscal situation, with a projected government deficit of 6.5% of GDP in 2026.

Rafal Benecki, ING chief economist for Poland, warns that “a convincing fiscal adjustment plan” is needed to maintain investor confidence.

Nevertheless, current economic sentiment is optimistic. Rzentarzewska sums up: “The low unemployment rate, the consumer confidence and, crucially, high productivity… all adds up to overall positive sentiment.”

“If Germany is unable to reform itself and Poland continues to perform the way it has done… it will eventually eclipse the likes of Germany, which could become like the rust belt of Europe,” Kirkegaard concludes.

By Sabina Mammadli