Poland: back on track

May 01, 2024

Perhaps surprisingly, Poland has had one of the longest growth cycles in global history over recent decades. And although this pattern was halted in 2020 by Covid and a worsening macro environment, not least the outbreak of war in neighbouring Ukraine, the country seems to be moving in the right direction again.

On a recent trip, I noted a positive mood everywhere, from government officials to corporations to consumers. A number of developments and reforms are currently underway that explain this upbeat attitude and the prospect of a return to sustainable growth:

  • An improving outlook: inflation has recently decreased to the long-term average (2.5%)1. As a result, interest rates are declining, and savings, purchasing power, and consumer confidence are being restored.
  • A new political direction: recent leadership changes have resulted in better prospects for structural reforms and an improved relationship with the EU, leading to access to an additional EUR60 billion in grants and loans.
  • A greener economy: the government is working on details of an energy reform plan, aimed at developing wind farms and boosting the amount of electricity produced by renewable sources, with an interim target of 30% of energy from these sources by 2030.
  • Deepening capital markets: given the promising outlook for the country and relatively low equity valuations, many investors have begun to invest in the domestic equity market for the first time.

In my piece, I look at these points in more detail and also highlight the potential risks, from an investor’s perspective.


1 IMF WEO, Haver Analytics, Morgan Stanley Research.

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