EME Macro/Strategy – Poland: bigger, happier but also more divided

In this report, we look at the short- and long-term outlooks for Poland. GDP growth prospects for 2025/26E are robust, thanks to support from EU funds, the nascent EU industrial recovery and improved balance sheets for households. Consumption growth is accelerating, in our view, as the period of strong savings accumulation is coming to an end. We expect investment growth at double-digit rates in 2025/26E, which reflects, to a large extent, the benefits of EU funds, as well as alleviating a recurring complaint of companies across sectors that costs are too high for capex. We believe the political backdrop is a not barrier to economic activity in the near term, but it raises challenges on the feasibility of reducing red tape, which is a meaningful structural bottleneck to investment in Poland. Our assessment of the competitiveness of the economy is positive, on the whole, even though Poland has converged to the EU averages to a large extent. We see the negative demographics and the complex regulatory environment as the main risks to vibrant economic growth in the medium and long term, but their effects on the economy shape the risks beyond three years.