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Monday, November 29, 2021

Poland’s economic growth (GDP) in 2021 and 2022 – forecast of the head of the OECD

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In 2021, economic growth in Poland will be around 5 percent and will remain at a similar level in 2022, said Mathias Cormann, Secretary General of the OECD (Organization for Economic Cooperation and Development). In his opinion, from 2023, the growth of the Polish economy will be slightly weaker, but still strong.

The head of the OECD said on Monday that the Polish economy is doing “exceptionally well” in the pandemic. He predicts that economic growth in Poland will “reach around 5 percent in 2021, and will also remain at 5 percent in 2022.” Growth will start to weaken slightly from 2023 but will remain strong, he forecasts.

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Inflationary pressure in Poland

He also pointed to issues related to inflationary pressure. According to him, it is not fully permanent, but – as he emphasized – one should “carefully observe, among other things, potential risks and react to them very carefully” – he stressed.

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“We believe some elements of inflationary pressure are temporary, related to the supply and demand mismatch in the wake of the pandemic,” Cormann said. He admitted that demand recovered much more than expected. On the other hand, it took more time to catch up on the supply, which was related to, inter alia, with logistic and transport challenges resulting from the pandemic. He also mentioned factors related to the increase in energy prices.

– In the case of Poland, due to the strength of the Polish economy, strong growth, low unemployment, there is a risk that wage pressure will persist – to avoid this, we will need (…) adjustments in monetary and fiscal policy, which the Polish authorities are ( …) conscious – he pointed out.

Poland and the coronavirus

In his opinion, Poland entered the coronavirus crisis “relatively strong when it comes to the fiscal condition” – he stressed. In this context, he indicated, among others, the debt-to-GDP ratio, which in Poland – despite the crisis – still does not exceed 60%.

Nevertheless, as Cormann pointed out, it is necessary to precisely “adjust the direction and mix of expenditures” – to direct them more to those sectors of the economy and those social groups that still really need support. He also recommended shifting expenses to a greater extent towards investments. According to him, it is important to “focus on more forward-looking investments”. The point, he emphasized, is to facilitate a “green and digital rebirth”.

OECD Secretary General on Poland’s economic growth

Speaking about the factors slowing down growth in Poland, the head of the OECD mentioned, inter alia, those that limit productivity and the share of labor in some sectors. In his opinion, it will be important to “mobilize all labor resources in the economy”.

According to Cormann, in Poland, as in Western countries, the aging population is a challenge. As he assessed, one should, inter alia, increase the participation of women in the labor market and of the elderly. He also pointed to structural challenges, such as decarbonisation, achieving zero CO2 emissions by 2050. – A green transformation is necessary, but one that will benefit both citizens and the economy – he emphasized.

The OECD Secretary General mentioned cybersecurity issues among the risks resulting from digitization accelerated by the pandemic. He pointed to the need for equal access to high-quality digital infrastructure. – Poland is in a good position here, it has a highly qualified workforce, but in terms of digital transformation it has work to do, among others, in the small and medium-sized enterprise sector – he assessed.

OECD

The Organization for Economic Co-operation and Development (OECD) brings together 37 highly developed and democratic countries. Its aim is to support the Member States so that they can achieve the highest possible levels of economic growth, employment and living standards. The OECD also contributes to the balanced economic development and promotes the development of world trade.

Poland was admitted to the organization in 1996, which influenced, inter alia, for a wider opening of the Polish economy and the improvement of its competitiveness and productivity; thanks to the OECD, there was also an increase in foreign trade and capital exchange.

Polish GDPPAP

Main photo source: Shutterstock



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