Poland's 2019 GDP growth forecast raised to second highest in Europe

The Harmonised Index of Consumer Prices (HICP), an inflation gauge used by the European Central Bank, is expected to reach 2.1 percent in 2019 and 2.7 percent in 2020, up from the previously expected respective figures of 1.8 and 2.5 percent. Kalbar/TFN

The European Commission, the EU's executive body, has raised Poland's GDP growth expectation to 4.4 percent from 4.2 percent and maintained its 3.6 percent growth figure for 2020, the EC's Wednesday-published summer forecasts show.

The Harmonised Index of Consumer Prices (HICP), an inflation gauge used by the European Central Bank, is expected to reach 2.1 percent in 2019 and 2.7 percent in 2020, up from the previously expected respective figures of 1.8 and 2.5 percent.

"Private consumption is expected to strengthen in the second half of 2019 and in early 2020, as new fiscal transfers and tax cuts increase household disposable income.

“Together with strong wage growth and favourable labour market trends, this is expected to support consumer confidence," the EC wrote. 

The forecast puts Poland on par with Hungary and slightly behind Malta.European Commission

"Investment growth continues to be supported by EU funds, and is set to remain strong in 2019, before slowing in 2020," the EC also said.

"Risks are slightly tilted to the upside for 2019 and mainly relate to net export and private investment growth. Risks to the 2020 growth outlook are slightly tilted to the downside," the EC went on to say. 

Commenting on inflation in Poland, the EC pointed out that a fast growth of wages over the forecast horizon will have a strong influence on the prices of services.

Energy prices will grow at a moderate rate this year and will increase in early 2020, after the removal of administrative controls on energy prices, the EC added.