Poland Sees 40% GDP Per Capita Growth Since EU Accession, IMF Reports

Poland's GDP per capita has risen 40% since joining the EU, with €6.3B in recovery funds released after reforms. The positive outlook highlights the benefits of EU membership, but the upcoming election casts a shadow over reform implementation.

Wojciech Zylm
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Poland Sees 40% GDP Per Capita Growth Since EU Accession, IMF Reports

Poland Sees 40% GDP Per Capita Growth Since EU Accession, IMF Reports

Poland's GDP per capita has risen by 40% since the country joined the European Union, according to a recent report from the International Monetary Fund (IMF). The IMF also projects Poland's annual inflation rate to be 5% in both 2024 and 2025, while the current account balance is expected to decrease from 0.7% of GDP in 2024 to -0.2% of GDP in 2025.

The positive economic outlook comes as the European Commission has disbursed €6.3 billion to Poland as the first installment of aid under the country's post-Covid-19 recovery plan. The payment, in the form of grants, was authorized after analyzing reforms and investments already made by the Polish authorities, including building onshore wind farms and improving air quality.

Why this matters: Poland's economic growth since joining the EU highlights the benefits of membership in the bloc. The disbursement of recovery funds also demonstrates the EU's commitment to supporting member states in their post-pandemic recovery efforts.

The release of the funds had been blocked for two years due to concerns about a lack of judicial independence and democratic backsliding under the previous government led by Prime Minister Mateusz Morawiecki. However, the new cabinet's nine-bill action plan, aimed at reversing controversial judiciary reforms and ensuring an impartial and non-politicized judiciary system, convinced Brussels to release the recovery money.

Poland is now focusing on making the most of the smaller grants portion of the EU's recovery funds, while treating the larger loan component as a fallback. The government is working to streamline the process of converting euro-denominated funds into Polish zlotys to speed up investments. However, some economists have warned that investor optimism about the renewed money flows may be overdone, with the impending Polish presidential election casting a shadow over the prospects of implementing the required reforms to keep the funds flowing.

Despite the two-year delay in receiving the recovery funds, which puts the implementation of the National Recovery and Resilience Plan at risk, Poland is preparing to revise the plan in consultation with the Commission to ensure its full implementation. The funds will be spent on the 'Clean Air' Programme, high-speed internet connections, and transport investments, with Poland expecting to receive an additional €23 billion by the end of 2024.

The IMF report's projections for Poland's economic growth and inflation rates provide a positive outlook for the country as it continues to benefit from its EU membership and works towards implementing reforms to ensure the continued flow of recovery funds. While the upcoming presidential election may impact the implementation of these reforms, Poland remains committed to making the most of the EU's support in its post-pandemic recovery efforts.

Key Takeaways

  • Poland's GDP per capita rose 40% since joining the EU, per IMF report.
  • EU disbursed €6.3B to Poland as first installment of post-COVID recovery aid.
  • Poland focusing on grants, not loans, to speed up investments from recovery funds.
  • IMF projects Poland's inflation at 5% in 2024-25, current account deficit in 2025.
  • Poland revising recovery plan to ensure full implementation of EU-funded projects.