{"id":213315,"date":"2025-10-20T14:33:09","date_gmt":"2025-10-20T14:33:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/213315\/"},"modified":"2025-10-20T14:33:09","modified_gmt":"2025-10-20T14:33:09","slug":"how-poland-became-europes-surprise-economic-success-story-dw-10-20-2025","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/213315\/","title":{"rendered":"How Poland became Europe’s surprise economic success story \u2013 DW \u2013 10\/20\/2025"},"content":{"rendered":"

In an era of existential economic gloom<\/a> across the European Union, one of the larger EU member states has been consistently posting positive numbers: Poland.<\/p>\n

A growth rate of almost 3% in gross domestic product for\u00a02024 put Poland\u00a0ahead of the overall EU rate of 1%, topping even those of\u00a0the bloc’s two largest economies, France and Germany<\/a>. France recorded a rate\u00a0of 1.2%;\u00a0Germany suffered a -0.2% contraction.<\/p>\n

The signs for 2025 are also positive. Poland recorded growth of 0.8% in the second quarter, the fifth-best rate in the European Union. Growth of about\u00a03.3% is forecast this year, with a 3% rate expected for 2026.<\/p>\n

Poland did\u00a0not become an overnight economic-success story. Since it joined the European Union in 2004, Poland’s average annual GDP growth has been almost 4%, a rate that has largely accelerated over the past decade.<\/p>\n

Yet there is particular momentum at present. Poland’s stock market has been surging, and optimism is growing around its capacity to develop into one of the European Union’s most robust and dynamic economies.<\/p>\n

“Over the last two decades, Poland definitely outperformed,” Katarzyna Rzentarzewska, chief macro analyst for Central and Eastern Europe at Erste Group, told DW.<\/p>\n

“Real GDP doubled,”\u00a0Rzentarzewska said.\u00a0“This is something outstanding. Obviously, it’s part of a process of convergence, but on the whole, Poland stands out.”<\/p>\n

‘Poland is big’<\/p>\n

Jacob Funk Kirkegaard, nonresident senior fellow with the Peterson Institute for International Economics, told DW that Poland’s success has been mirrored to an extent by other eastern EU and Baltic states, but that the country’s size is a key difference.<\/p>\n

“Poland is big,”\u00a0he told DW. “So it actually matters, if you like, at the aggregate EU level \u2014 in a way that a much smaller economy doesn\u2019t \u2014 both politically and as a matter of economic weight.”<\/p>\n

Poland has a population of 37\u00a0million,\u00a0the fifth-largest in the European Union. Its economy is now ranked just inside the top 20 in the world in terms of GDP.<\/p>\n

Allied to Poland’s growing economic heft is its strategic and geopolitical importance. In recent years, Poland has boosted defense spending to the extent that it is now No. 1 in NATO in terms of the share of GDP it spends on defense, currently about\u00a04.5%.<\/p>\n

Much of the defense spending is on overseas orders rather than domestic production, but, Rzentarzewska said,\u00a0a lot of Poland’s growth is driven by domestic private consumption, rather than exports.<\/p>\n

“It is the pillar of the growth,” she said, noting that Poland’s strong domestic market can be seen in its low unemployment and real-wage growth. That also gives it the capacity to be relatively sheltered from external shocks.<\/p>\n

“When you see a global downturn, then obviously first to be hit are the smaller, export-oriented economies because that’s how the value chain works,” she said. “In Poland’s relatively closed economy, consumption remains strong.”<\/p>\n

\"Germany-PolandPoland and Germany share a border, but their economic paths increasingly divergeImage: IPON\/IMAGO<\/p>\n

A model of integration<\/p>\n

So what exactly has Poland gotten right?\u00a0Rzentarzewska said its successful integration into the European Union, NATO, the Schengen Area and the OECD were keys to its success.<\/a><\/p>\n

“If we look at the broad concept of integration, Poland did it really well,” she said. Although it has not joined the eurozone, it has benefited from extensive EU funding since joining the bloc in 2004.<\/p>\n

“We cannot deny that the access to European funds was huge \u2014 a major contributor to the growth,” she said.<\/p>\n

Kirkegaard said\u00a0Poland “has gotten the basics right”.<\/p>\n

“They have used EU funding to significantly improve their infrastructure,” he said. “They have completely eradicated street-level corruption that was rampant during the Communist years. They have fundamentally succeeded in generating a very welcoming business environment. They have a generally well-educated workforce.<\/p>\n

“Poland is a poster child for successful EU integration. They needed to get it right because they are so big. And they got it right.”<\/p>\n

Political division threatens EU funds<\/p>\n

There are potential headwinds. For much of the past two decades, Poland has been politically divided between a large right-wing bloc, led by the national-conservative Law and Justice (PiS) party and by a liberal\u00a0bloc, currently led by Prime Minister Donald Tusk’s Civic Coalition.<\/p>\n

\"TuskPolish Prime Minister Donald Tusk (left) speaks to President Karol NawrockiImage: Kacper Pempel\/REUTERS<\/p>\n

Tusk’s coalition is more pro-EU, and his group’s victory in the 2023 parliamentary elections was seen as helpful to securing longer-term EU funding for Poland, given that Law and Justice regularly got into disputes with Brussels over judicial independence when it was in power.<\/p>\n

The victory of PiS-supported euroskeptic Karol Nawrocki in the 2025 presidential election<\/a>was seen as\u00a0potentially damaging to Poland’s future EU relations.<\/a><\/p>\n

Weeks after taking power in 2023, Tusk was able to convince the European Commission to release \u20ac137 billion in funding, providing that he bring Poland’s justice system back into line with EU norms and rules.<\/p>\n

Tusk’s attempts to consider the possible removal of judges appointed during PiS’s period in government is bringing him into direct conflict with Nawrocki.<\/p>\n

Yet, Rzentarzewska said,\u00a0despite Poland’s political divisions, the country has made economic progress under both blocs<\/a>. “Poland is a good example of how you can have progress and dynamic growth under different political parties or orientations, be it conservative or or more liberal,” she said.<\/p>\n

The new Germany?<\/p>\n

Rzentarzewska said increased\u00a0welfare spending, such as child benefits introduced by Law and Justice, had\u00a0been beneficial and had\u00a0helped boost the economy.<\/p>\n

She cautioned\u00a0that extra spending, combined with the hike in defense spending and inflation,\u00a0has\u00a0contributed to a tight fiscal situation in Poland.<\/p>\n

According to recent plans presented by Finance Minister\u00a0Andrzej Domanski, Poland’s government deficit will be 6.5% of GDP in 2026.<\/p>\n

Rafal Benecki, chief economist for Poland at ING, said\u00a0the country’s robust growth rate meant that\u00a0ratings agencies and investors are generally not concerned, but he believes it needs “a convincing fiscal adjustment plan to boost confidence.”<\/p>\n

Rzentarzewska said: “Poland will need to tackle that. It will need to undergo a fiscal consolidation, fiscal austerity, and this is naturally something that can slow growth.”<\/p>\n

But,\u00a0Rzentarzewska said,\u00a0the current mood of confidence is justified. “The low unemployment rate, the consumer confidence and, crucially, high productivity \u2014t hat all adds up to overall sentiment, positive sentiment\u00a0and performance of the economy,” she said.<\/p>\n

Kirkegaard said\u00a0there was much that Poland could teach the rest of the European Union about economic dynamism and flexibility.<\/a><\/p>\n

“There was a time when Michigan and what is today the ‘Rust Belt’ in the United States\u00a0was the economically dominant part of the US economy,” he said. “That’s not the case anymore.<\/p>\n

“But if you assume that Germany is unable to reform itself and Poland continues to perform the way it has done since it became a member of the EU 20 years ago, then it will eventually eclipse the likes of Germany, which could become like the rust belt of Europe.”<\/p>\n

Edited by: Kristie Pladson<\/p>\n","protected":false},"excerpt":{"rendered":"In an era of existential economic gloom across the European Union, one of the larger EU member states…\n","protected":false},"author":2,"featured_media":213316,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-213315","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/213315","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=213315"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/213315\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/213316"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=213315"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=213315"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=213315"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}