EBRD raises Poland's GDP growth forecast

The European Bank for Reconstruction and Development raised Poland's GDP growth forecast for 2018 to 4.7 pct year on year, and to 3.6 pct year on year for 2019, up by 0.7 and 0.3 pct respectively, compared to May's forecasts, the bank said in a recent report.

"GDP growth may have peaked in mid-2018, but it is expected to remain robust over the forecast horizon. Amid increasing inflation, household consumption will likely soften to some extent, but the tightening labour market, noticeable largely in rising wages, will keep it at a high level. Investment is expected to continue its recovery, particularly in the public sector," the report read.

The bank added that GDP growth in 2018 is forecast to reach 4.7 percent before it slows down to 3.6 percent in 2019.

EBRD's report said that a possible delay in the recovery in private investment of domestic companies, as well as global trade disruptions constitute a downside risk to GDP growth.

According to the bank, the labour market in Poland is undergoing "a major structural shift."

"Labour supply is falling due to ageing, a decreased retirement age, and the lower participation of women because of higher social benefits. A counter-balancing factor is the surge in immigration, mostly from Ukraine and Asia," the report read.