Page 6 - Poland Outlook 2024

Zooming in, a substantial recovery in consumption is anticipated in 2024, propelled by robust wage dynamics outpacing inflation and thus pushing up disposable incomes.
The gap in EU funding between two funding periods will be mitigated by the inflow of the Recovery and Resilience Facility (RRP, the EU’s pandemic recovery fund), promising around €5bn in pre-financing, before reforms pledged by the new government unlock more.
Business sentiment surveys also suggest a possible slight acceleration in corporate investments, but the indicator of new investments in the NBP Quick Monitoring survey remains below the long-term average.
Millennium Bank forecasts an acceleration in economic growth to 2.9% in 2024, driven by consumer demand, while investments in durable goods may slow down. The relationship with the EU, particularly after parliamentary elections, is deemed crucial for the release of funds from the National Reconstruction Plan (KPO, Poland’s vehicle for disbursing RRP’s funds) supporting investments in energy transformation and digitization. However, weak economic conditions in Germany could impede growth recovery, affecting the overall investment landscape.
Despite potential challenges, the KPO is expected to significantly boost investment dynamics, with an estimated inflow of PLN 35bn in 2024 alone. The GDP growth structure, driven by private consumption, may hinder a rapid return of inflation to the National Bank of Poland's target.
PKO BP anticipates GDP growth of above 4% in 2024. This upward revision of the forecast is attributed to a higher starting point, improved investment prospects, and consumption’s earlier return to dynamic growth.
mBank expects a growth rate of 3.5%, primarily driven by private spending and supported by rising real wages and government transfers. Despite potential challenges in investments leaving the country, robust domestic demand, high capacity utilisation, and the unlocking of EU funds contribute to a positive growth outlook.
The main sources of uncertainty are: the shape of fiscal policy and the scale of EU fund inflows, the trajectory of inflation and real household incomes, the competitiveness of the export sector in the face of rising costs and the economic downturn in Germany, and the course of the war in Ukraine and its consequences.
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