GDP growth at 3.9% in 2020, says the government

The Council of Ministers revealed its predictions with regard to the economy of Poland in the upcoming three years. The presumptions will be used to prepare the State’s Multiannual Financial Plan for the years 2017-2020 and an update of the country’s convergence programme. The government’s outlook is positive.

The Multiannual Financial Plan is the foundation upon which the budget act is constructed. It presents the country’s macroeconomic assumptions for three consecutive years. The convergence programme, which constitutes a substantial part of the Plan, will be presented to the European Commission and ECOFIN (Economic and Financial Affairs Council) by the end of April, as required by EU fiscal regulations.

Economic experts from the Ministry of Finance predict that GDP growth in Poland will keep going strong, passing 3.6 percent in 2017 and 3.9 percent in 2020. However, International Monetary Fund expects that in 2017 Polish economy will grow at the rate of 3.4 percent. Moody’s is even more cautious, predicting the figure will be 3.2 percent.

Good news is also expected to come from the labour market. The official unemployment rate is predicted to fall to 4.0 percent. If this turns out to be true, Poland will have a record-low number of people out of work. On the other hand, some Polish companies may experience staff shortages. Still, low unemployment is likely to translate to higher consumption (the main driver of the GDP growth) and increased tax revenue. Wages are expected to grow by over 5 percent in 2020. These numbers are in line with the predictions of the National Bank of Poland.

As ECOFIN recommends, the Council of Ministers is planning to reduce public debt. The Ministry of Finance is also going to continue to fight VAT fraud and, in this way, seal the gap between the expected and actual VAT revenue of the state budget.

The Multiannual Financial Plan and Convergence Programme are updated every year.