Polish economy maintains momentum despite external pressures

• Polish economy to grow by 3.5 per cent in 2026, according to latest EBRD forecasts
• Growth outlook remains unchanged thanks to strong economic fundamentals and robust investment activity
• Economy expected to grow 2.8 per cent in 2027 in a more challenging global environment

The European Bank for Reconstruction and Development (EBRD) has left its growth forecasts for Poland unchanged from its previous projections in June, expecting the economy to expand by 3.5 per cent in 2026 before moderating to 2.8 per cent in 2027.

In its latest Regional Economic Prospects report, the Bank notes the continued strength of the Polish economy, supported by strong investment activity and the continued absorption of European Union (EU) funds. Growth reached 3.6 per cent in 2025 and remained robust at 3.5 per cent year on year in the first half of 2026.

Poland remains one of the fastest-growing economies in central Europe and the Baltic states, where average growth is forecast at 2.9 per cent in 2026. The Polish economy has benefited from a surge in gross fixed capital formation, which recorded its strongest expansion since 2023 in the first half of 2026 as the implementation of projects financed through the EU Recovery and Resilience Facility (RRF) accelerated ahead of programme deadlines.

Temporary fuel-price measures to the end of August have helped to contain inflationary pressures despite external shocks, including higher energy prices stemming from geopolitical tensions in the Middle East. Inflation stood at 3.4 per cent in August 2026, remaining within the National Bank of Poland’s tolerance range, and the policy rate has remained unchanged since it was last cut in March.

Poland is also expected to benefit from significant defence-related investment and has secured the largest allocation under the European Union’s Security Action for Europe (SAFE) instrument. The government expects more than 80 per cent of this spending to take place domestically, providing additional support for economic activity.

At the same time, external risks – such as weaker demand from the euro area, Poland’s most important export market, and persistently high energy prices due to the conflict in the Middle East – present a downside risk to continued growth. Poland’s fiscal position also remains a concern. Despite strong economic growth, the country has the second highest general government deficit in the EU, and remains subject to the EU’s excessive deficit procedure. It is expected to miss its 6.8 per cent budget deficit target in 2026, as fiscal commitments, including the fuel-price measures, cause expenditure to outpace tax revenue.

The EBRD notes that the broader regional outlook has become more challenging since June, reflecting higher energy costs, tighter financing conditions and disruptions to international trade and logistics. Consequently, the Bank has revised down its aggregate growth forecast for the EBRD regions for 2026.

The EBRD is a leading institutional investor in Poland. In 2025, the Bank invested over €1.35 billion through 44 projects, with 74 per cent of financing supporting renewable energy, energy storage, energy efficiency and sustainable infrastructure. Since beginning operations in the country in 1991, the EBRD has invested more than €17 billion in Poland.