Moody's downgrades Poland's GDP growth forecast for 2023

Poland’s GDP will contract by 0.2 percent, year on year, in 2023, according to the credit ratings agency Moody's.

In a report published on November 1, Moody's wrote the contraction would stem from a decline in domestic demand, and the troubles of Poland's main trading partners filtering down to affect the Polish economy.

"While we expect Poland to record strong real GDP growth of 3.4 percent in 2022, thanks to the effect of a strong start to the year, we revised our forecast for 2023, now anticipating a contraction of 0.2 percent, compared to the 4-percent growth projected before the Russian invasion of Ukraine," Moody's wrote.

It pointed out that the decrease would be the result of worsening consumer and investor sentiment affecting demand, while purchasing power would be eaten away by an inflation rate the government would struggle to contain.

Moody's added that inflation was not expected to slow in the near term as it would "rise further in the coming months, before somewhat easing in the following year, averaging 13.2 percent in 2022 and 12.1 percent in 2023."

Poland's growth would also be hit by "the economic downturn of its main trading partners, particularly Germany" and "this will not only weigh on Polish export growth, but also affect sentiment and business confidence, with a dampening effect on investment growth," Moody's said.