Poland's GDP growth for 2023 was revised to 0.1% from the previous estimate of 0.2%, the national statistics office GUS announced on October 10.

The revision confirms that Poland just dodged a recession last year after its economy grew by a robust 5.3% in 2022. The primary factor behind the disappointing result in 2023 was a 1% decline in household consumption, which had risen by 5.2% the previous year. Analysts attributed the drop in consumption to high inflation and interest rates.

Inflation in Poland reached 11.4% in 2023, significantly exceeding the National Bank of Poland’s (NBP) target of 2.5%.

On a more positive note, investment grew by 8% in 2023, up from 4.9% in 2022. However, overall domestic demand contracted by 4.1%, after growing 5.2% the previous year.

The economy is expected to grow by around 3% in 2024 on the back of a reinvigorated consumption, supported by a recovery in savings and strong real wage growth. Investment is expected to continue growing, aided by EU pandemic recovery funds.

Most recent GDP growth data show that the economic recovery began gaining momentum in the second quarter, with growth surging 4% y/y, picking up sharply versus a revised gain of 1.8% y/y in the preceding three months, GUS said in August.

The outlook for monetary policy remains unchanged, however, as sustained economic growth and the prospect of further inflation increases reinforce the National Bank of Poland’s NBP’s hawkish stance.

The NBP’s reference interest rate has remained at 5.75% since October. With inflation expected to begin easing only in 2025 sometime, the NBP will possibly start a new round of monetary easing in the second quarter of that year.