EC upgrades Poland's GDP forecast for this and next year

The European Commission (EC), the EU's executive arm, has raised its 2023 GDP growth estimate for Poland to 0.7 percent from 0.4 percent forecast in February.

In a report published on Friday the EC also upgraded its 2024 GDP growth forecast for Poland to 2.7 percent from the 2.5 percent expected earlier.

"This (GDP growth - PAP) forecast is however subject to high uncertainty with risks mainly tilted to the downside," the EC wrote.

"A more persistent increase in inflation, especially given Poland's tight labour market, could put significant pressure on real incomes. A tightening of financing conditions might constrain fiscal policy, with repercussions for economic growth."

Poland's average inflation rate will reach 11.7 percent this year and 6.0 percent next year, according to the report, against the February estimates of 11.7 and 4.4 percent, respectively.

The unemployment rate in Poland will increase only slightly to 3.3 percent in 2023, and will gradually decrease to 3.2 percent in 2024, the EC estimates showed.

The EC expects Poland's wages to continue to grow at a strong pace, driven by a rise in the minimum wage and a low unemployment rate.