Inflation and conflict with EU threaten Poland's development - experts

Growing inflation, disputes with the EU, the pandemic and rising energy prices are among the greatest challenges to economic development in Poland, experts from the European Financial Congress (EKF) think tank have said.

On Tuesday, EKF presented an analysis titled "Macroeconomic challenges and forecasts for Poland" based on the assessments of Polish economists, primarily bankers.

In terms of the threats to the economic situation in Poland in the perspective to 2023, the experts indicated that "persistent inflation" posed the greatest risk. Their analysis also showed that inflation expectations had increased. EKF experts estimate the average inflation will be around 5.1 percent this year, 6.3 percent in 2022 and 4.4 percent in 2023.

Economists working with EKF pointed to the conflict with the EU as the second largest menace to the country's economic situation. "The conflict between Poland and the EU, which has been swelling over many months, may threaten the billions of euros needed to help us recover from the pandemic, reform the national energy sector, accelerate digitisation and support business," the report read.

The consequences of the Covid pandemic were listed as the third major hazard, followed by "rising energy prices," which are partly responsible for high inflation, but, due to the dependence of the Polish economy on coal, also constitute a huge economic problem.

According to the current forecasts of EKF experts, after last year's recession of minus 2.5 percent, a strong economic rebound and GDP growth at around 5.2 percent should be expected in 2021, but then the growth will decelerate to 4.4 percent in 2022 and 4.0 percent in 2023.

Experts are more optimistic than before concerning the increase in investments this year (estimated at 6.7 percent), but much more pessimistic about its rate in the coming years (6.5-6.7 percent).

The labour market situation is also expected to remain relatively solid with the unemployment rate around 3 percent.