Poland's economic performance and standards of living have improved significantly over the past two decades despite a growth slowdown over past two years. Policies should focus on returning to a path of strong economic growth, managing population ageing, improving health and long-term care, and accelerating the green transition, according to a new OECD report.
The latest OECD Economic Survey of Poland says that, following large increases in health, social and defence spending following the pandemic and the war in Ukraine, Poland requires a sustained fiscal adjustment to reduce the budget deficit.
The recovery has regained momentum. Improving external demand, falling inflation and easing financial conditions will support growth. Real GDP is projected to expand by 3.4% in 2025 and 3% in 2026, the strongest growth in OECD countries in Central Europe.
Headline inflation is projected to rise to 5% in 2025 but fall to 3.9% in 2026. Monetary policy needs to remain restrictive, but interest rates should gradually ease as wage growth slows and inflationary pressures recede.
"Improving fiscal sustainability and increasing the economy's capacity to respond to any future shocks will be essential to Poland's continued resilience and growth," OECD Chief Economist Álvaro Santos Pereira said. "The planned fiscal consolidation should be implemented. At the same time, more efforts are needed to continue raising living standards and address long-term challenges, such as population ageing and the green transition."
Government spending and tax revenues should be comprehensively reviewed. Family benefit policies can be better targeted and revenues increased from property taxes.
Enhancing regulation and reforming the governance of state-owned enterprises would boost competition and sustain continued productivity growth. Regulatory barriers to competition in services should be lowered, along with continued upskilling of the workforce. Governance of state-owned enterprises should be better aligned with OECD guidelines.
Despite significant improvements in health outcomes over the past two decades, life expectancy is still among the lowest in the OECD. Public spending on healthcare has been rising and is planned to reach 7% of GDP in 2027, up from an estimated 5.8% in 2023.
Efficiency in the healthcare sector can be improved by consolidating the hospital network and strengthening prevention and care coordination. Further investment in infrastructure and equipment is needed. The authorities should continue to raise the number of training places for nurses and develop a comprehensive workforce strategy. Improving working conditions in the health sector would help to retain staff.
Progress in reducing greenhouse gas emissions has been slow but an update of the National Energy and Climate Plan until 2030 brings more ambition. Due to heavy reliance on coal, the energy sector accounts for more than 40% of emissions. Emissions from the transport and buildings sectors are sizeable. Planned reform of vehicle taxation should follow international best practices and cover all cars, while public transport should also be improved.
See an Overview of the Economic Survey of Poland with key findings and charts
