EC lowers Polish GDP growth forecast for 2023

The European Commission (EC) has downgraded predicted Polish GDP growth in 2023 from 0.7 to 0.4 percent.

"Elevated inflation and low consumer and business confidence are expected to keep weighing on economic growth in the coming quarters," the EC wrote on Monday in its Winter 2023 Economic Forecast.

"In particular, declining real incomes amid an already low savings rate will likely put downward pressure on private consumption, which is projected to decrease slightly in 2023," the EC said.

However, foreign direct investment and the expected rise in public spending and exports will contribute to growth, the EC added.

In 2024, the Polish economy is expected to rebound and see 2.4-percent GDP growth, according to the EU's executive arm.

The EC also lowered its HICP inflation expectation for Poland to 11.7 percent throughout 2023 from the 13.8 percent projected in November. In 2024, inflation is expected to decline to 4.4 percent.

"While core inflation will likely be fuelled by strong wage growth and an expansionary fiscal stance, falling wholesale energy prices and some easing in the labour market are expected to gradually dampen inflationary pressures, especially towards the end of the forecast horizon," the EC wrote.