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GDP growth is projected to exceed 3% in 2017 and 2018 as domestic demand accelerates and investment recovers on the back of growing business confidence, faster EU structural funds disbursement and low real interest rates. Underlying price pressures are set to build as the labour market tightens.
The central bank is projected to start raising interest rates in early 2018 as inflation increases and slack disappears. The budget deficit may widen due to rising social benefits. Removing VAT tax breaks would put the public finances on a firmer footing and could also provide room to increase infrastructure and age-related social spending.
Poland has benefitted substantially from its integration into global value chains. As foreseen in the government’s responsible development plan, stimulating private R&D spending and improving research quality and university-industry collaboration will be essential to improve Poland’s ability to innovate and adopt new technologies to move towards higher technology production and strengthen trade prospects. Too many adults have low skills; improving their access to training while strengthening firms’ engagement in vocational education would ensure that globalisation benefits are shared more widely.
Economic Survey of Poland (survey page)