Poland’s growth outstrips EU and CEE peers

According to the flash estimate, Poland’s GDP increased by 3.7%YoY in 3Q25, after a 3.3%YoY growth in 2Q25, beating other CEE countries (Czechia: 2.7%, Hungary: 0.6%) and the EU as a whole (1.5%). A low reference base partially explains the sizeable increase in the annual growth rate due to subdued economic activity in September 2024, when the country experienced flooding, but seasonally adjusted data indicates that the pace of expansion remained at a solid 0.8%QoQ as in 2Q25.

A detailed GDP report, including its composition, will be published on 1 December, but data released so far indicate an improvement in industry vs. 2Q25, a slightly slower annual increase in retail trade, and continued recession in construction. We estimate that the services sector remained in good shape and supported GDP growth in 3Q25, but we hoped for stronger activity in this area of the economy. From the expenditure side, GDP was propelled by buoyant household consumption that probably expanded at a similar annual rate as in the previous quarter. At the same time, the expected rebound in investment activity has been delayed explained by, among other things, to the slow implementation of domestic Recovery and Resilience Fund (RRF) financed projects and their necessary revisions.

We still expect 3.5% GDP growth in Poland this year. Data released so far shows that the scenario of much stronger fixed investment performance this year is not materialising, but it is compensated by the resilience of private consumption, which is proving to be stronger than expected earlier. The timeline of RFF execution gives ground for optimistic forecasts of fixed investment in 2026.

Poland’s economy is set to maintain growth in excess of 3%, outpacing the EU average and CEE peers, which have underdelivered on GDP growth for the second year in a row. The country's robust growth is accompanied by the absence of major external or internal imbalances. The current account deficit is around 1% of GDP, while CPI inflation is close to the central bank's 2.5% target.

Substantial imbalance is observed between the public sector (high deficit) and the domestic private sector (low investment, high savings). We stick to our full-year GDP forecast at 3.5%YoY in 2025 and expect the economy to sustain a similar level of activity in 2026 (3.4%YoY).