For the end of this year atradius confirm the Polish GDP growth at sustained levels (+4%), thanks mainly to a still robust demand for investments and consumption. A slight slowdown of the economy is expected in 2020 (+3%): if, on the one hand, a decrease in investments and exports is expected, on the other, the growth of private consumption should remain supported by the increase in jobs work, wages and social transfers (in this regard, see the 500+ child benefit programme, now also extended to the first child).
After deflation in 2015-16, consumer prices started to grow again in 2017, driven by wage increases. Inflation is expected to rise above 2% in 2019-20: monetary policy has so far been accommodative and the Central Bank has kept the reference interest rate at 1,5%. Public debt is moderate and amounts to about 50% of GDP, while the budget deficit has decreased since 2017 thanks to increased tax revenues and improved tax collection. However, public spending has increased again due to the lowering of the retirement age, continued social spending and public investment ahead of the October 2019 elections which reconfirmed the outgoing majority.
Not all that glitters is gold. Due to the further tightening of the labor market, the shrinkage of the labor market is increasingly becoming a problem, especially in the manufacturing sector. According to analysts, the labor shortage could weigh on potential economic growth, aggravated by the early retirement of a large share of the workforce by virtue of the lowering of the retirement age to meet the pre-election promises of the current government majority.
Furthermore, concerns about the impact that external factors such as tariffs on US imports and uncertainty about Brexit developments will have on exports and investments should not be underestimated. Here then is that in Central Europe the Polish economy seems to be the most vulnerable to the financial and economic consequences of Brexit: the annual remittances of Poles residing abroad amount in fact to around 4 billion euros, a large part of which comes from the United Kingdom. Furthermore, the process of separating London from the rest of the EU could affect the European structural funds themselves, which play an important role in Poland's economic progress. Not forgetting that the United Kingdom represents the second destination of Polish exports after Germany and, once the Brexit process is completed, PiS (the majority party in government since 2015) would find itself without its most powerful ally in the European Parliament.
