Economic performance has continued to improve over recent decades and picked up again after the pandemic, with Polish GDP per capita now 30% below the average of upper half of OECD countries. Although productivity still lags OECD levels, the country has seen considerable investment and productivity convergence. Both employment and participation rates have increased in recent years, while the unemployment rate has fallen to record lows.

To sustain growth, Poland will need to counter the headwinds of population ageing, by improving health outcomes, enhancing the skills of the working-age population and increasing further female employment. Strengthening competition in services, management of state-owned enterprises and insolvency regime can add a boost to business growth.

The economy is projected to grow by 3.3% this year, 3.4% in 2026 and 2.7% in 2027. With falling inflation, large EU-funded projects and easing financial conditions, household consumption and investment will remain strong next year. Fiscal consolidation and the end of the EU’s Recovery and Resilience funding in 2026 will moderate demand in the following years. Inflation will ease to 2.9% in 2026 and 2.7% in 2027. Greater weakness in the euro area, global trade and deeper geopolitical tensions could weaken growth, while stronger wage growth and labour demand could lead to more inflation.

Monetary policy easing should continue at a slower pace. Although partly attributable to increased defence spending, significant fiscal deficits reflect higher social spending and need to be addressed. To rebuild fiscal buffers and set the debt ratio on a downward path, steady fiscal tightening through both spending and revenue measures should be implemented over the coming years. Implementation of wide-ranging measures to reduce red tape should continue.

Czechia and Poland have experienced strong economic growth and significant improvements in living standards. Higher incomes and lower unemployment have put upward pressure on the demand for housing, while the supply has struggled to keep pace in many areas. The report analyses housing market trends in both countries and provides country-tailored recommendations to boost the supply of affordable housing and address the housing needs of vulnerable groups. The report presents strategies to unlock affordable housing development, including by facilitating the emergence of affordable housing providers, making more efficient use of spatial planning and land-based finance tools, and reforming property taxes. It also explores ways to adapt housing to meet the needs of an ageing population, mobilise existing buildings for affordable housing, and strengthen tailored housing solutions with integrated health and social services for people with higher support needs.