Poland’s economy, the largest in central Europe, slowed less than expected in 2022. Even as high inflation began to increasingly affect demand, it maintained steady growth throughout the year.
Central European economies began to be at risk of recession in the second half of 2022. They predict slowdowns in 2023 as the effects of high energy costs, the war in Ukraine and reduced consumer spending become more obvious.
However, data released by the statistics office on Monday indicates that Poland started the new year slightly better than other countries. Poland’s gross domestic product rose 4.9% annually last year, slightly more than the 4.8% forecast in a Reuters poll.
Grzegorz Maliszewski, Bank Millennium’s chief economist, said, “This extremely good result is largely the effect of a very good first half of the year.” They added that economic growth clearly slowed down in the second part of the year as the effects of higher inflation and higher interest rates manifested themselves.
Double-digit inflation is eating away at workers’ wages in and around Poland, which analysts say was evident in sluggish consumer activity even in full-year data. The statistics agency did not provide data in quarterly increments, and the deadline for fourth-quarter preliminary estimates is February 14.
More about the Polish economy
Analysts anticipate that the Polish central bank will continue its policy of stable rates this year. Since 2021, when the annual rate hike cycles began, the region’s central banks have worked to maintain stable monetary policy to help the economy weather the recession. Poland’s central bank base rate, which currently stands at 6.75%, predicts growth of 0.7% in 2023.
Poland’s growth is comparatively strong, but only 2% or less than the EU average. Before you lose access to the cohesion fund, your per capita income must double. Low-income economies have an easier time when it comes to high growth, which slows down over time. Other low-income economies expand faster and increase average growth. According to these numbers, Poland will need cohesion funds for another generation.
The ratio may be the same as in 2015, but the amounts of Euros and Polish Zlotys at stake are different. And for everyday purchases, the zeros and ones on computers are more important than paper, which only provides a localized representation. If a nation’s economy collapses, its currency immediately reflects it. But the reverse does not apply. If a nation does well, its currency is, at least in part, what the issuer wants it to be.
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