Polish GDP growth is projected to reach 4% in 2017, according to the international rating agency Fitch, as domestic demand accelerates and investment recovers on the back of growing business confidence, faster EU structural funds disbursement and low real interest rates. On the 4th of October, The Polish Central Bank announced that the reference rate remains 1.50% on an annual basis.
The Polish Central Bank is projected to start raising interest rates in early 2018 as inflation increases and slack disappears. The budget deficit may widen due to rising social benefits. Removing VAT tax breaks would put the public finances on a firmer footing and could also provide room to increase infrastructure and age-related social spending.
Poland has benefited substantially from its integration into global value chains. As foreseen in the government’s responsible development plan, stimulating private R&D spending and improving research quality and university-industry collaboration will be essential to improve Poland’s ability to innovate and adopt new technologies to move towards higher technology production and strengthen trade prospects.
source: oecd.org, nbp.pl, fitchratings.com
