Poland's economy to grow by 3.7 pct in 2022 says European Commission

Poland's GDP will increase by 3.7 percent this year and by 3 percent in 2023, the European Commission (EC) said in its spring forecast on Monday.

The country's HICP inflation will reach 11.6 percent on average this year and 7.3 percent in 2023, according to the EC.

The war in Ukraine will have a significant impact on economic activity in Poland in the forecast horizon, mainly due to a deterioration in consumer sentiment, a collapse in trade with Russia and Ukraine and increased inflation, the EC said.

However, an inflow of Ukrainian refugees will compensate for some of the shortfall in consumption, the EU body added.

In its previous forecast, released in February, the EC predicted a 5.5 percent GDP growth for Poland in 2022 and a 4.2 percent increase in 2023. The HICP inflation was seen at 6.8 percent in 2022 and 3.8 percent in 2023.

The Polish general government deficit will rise to 4.0 percent of GDP this year from 1.9 percent in 2021 and to 4.4 percent in 2023, the EC said, arguing that negative economic consequences of Russia's aggression against Ukraine will lead to a deterioration of Poland's fiscal condition.

The war and the resulting increase in inflation spurred the Polish government to introduce anti-inflation measures and offer aid to Ukrainian refugees, which will weigh on the country's budget, according to the EC.

The general government debt will reach 50.8 percent of GDP in 2022 and 49.8 percent in 2023, the EC said.