Macroeconomic overview, end-November 2025

The big picture for UK and foreign investors interested in Poland. Key macroeconomic indicators updated monthly.  [GUS = Główny Urząd Statistyczny – Statistics Poland]

Commentary

Two pleasant surprises appeared in November’s figures. GDP, according to GUS’s preliminary data, grew by 3.8% year on year, and 0.9% quarter on quarter. (The UK’s economy grew by an anaemic 0.1% quarter on quarter over the same period.) The second surprise was the fall in inflation to below the National Bank of Poland’s target, to 2.4% (from 2.8% in October). The growth figures have been boosted by consumers and by private and public investment, the latter by EU funds going into infrastructure projects.

Industrial modernisation in the defence sector and green energy are also boosting Poland’s economic growth.

In July, Poland officially overtook Switzerland to become the world’s 20th largest economy, as it joined the group of countries whose economies generate over a trillion dollars.

Wages continue to grow (6.6%) ahead of prices (2.4%), leading to rising retail sales, with industrial and construction output have returned to positive territory. The gap between wage growth and inflation continues to shrink, as wage rises moderate. On 1 January, the national minimum wage goes up again, but this year by only 3% rather than the 10% that occurred on 1 January 2025. Inflation peaked at 5.0% in March 2025, and the National Bank of Poland responded to the faster-than-expected fall in inflation by cutting the base rate four times from 5.5% in the spring to 4.25% today, and a further 25-basis-point cut expected in early December.

Recruitment and retention remain major issues for employers. However, rising real wages are making their way through to retail sales. Although manufacturing industry has returned to a seven-month run of negative PMI readings after three months with a score above 50, there is optimism that it will soon return to positive territory, driven by hope that German economic growth will finally break the 1% barrier in 2026. The EU’s decision to massively boost spending on military production and green energy infrastructure has raised manufacturers’ spirits.

Unemployment has started to inch up. By the Polish government’s data based on registered unemployment, it has risen from 5.0% in late last year to 5.6% in October 2025. This has been put down to a change in methodology, but anecdotal evidence suggests that graduates are finding it much harder to find their first white-collar jobs in sectors such as accountancy, legal and media, as AI begins to displace entry-level tasks. Poland’s labour productivity continues to grow much faster than in the Eurozone.

Looking back at the past 20 years since Poland joined the EU, it is clear that Polish workers have done well over that time. Whilst inflation had doubled prices, wages have increased three-fold, representing an increase in spending power of over 50%. Contrast this situation with the UK, where real wages have not budged in 20 years.

Although the Polish government, formed in autumn 2023, is seen as more business-friendly in its rhetoric, it is still difficult to point to specific improvements in the overall business environment. Victory of a presidential candidate from the opposition bloc suggests that ongoing legislative stasis is more than likely to continue, raising political uncertainty; having said that the current cohabitation lessens the risk of controversial legislation being passed.

Questions facing investors in Poland centre on the future of Russian hostilities in Ukraine and the possibility of a ceasefire. An end to the shooting war would signal a major reconstruction boom in Ukraine, with Poland a natural logistics platform and partner for that process. Another area of uncertainty is the state of Western Europe’s – specifically Germany’s – economic prospects, as Poland’s manufacturing depends heavily on German customers, in a supply chain that has a significant exposure to the US market.

The US is Poland’s eighth-largest export market and third-largest import source; last year, Poland had a $5.9 billion deficit in trade in goods with the US. The first three quarters of this year suggest that this deficit will fall slightly in 2025.

Overall trade in goods for the first three quarters of 2025 show Poland with a small deficit of €4.6 billion, with the value of goods exported falling faster than that of imports. In H1 Q1-3 2025, Poland’s trade surplus in goods with the UK, at €9.7 billion, was exceeded only by that with Germany, at €20.1 billion. ONS data from the UK shows both Poland and the UK having record values of goods exported bilaterally throughout this year.

Demographics and the labour market

Unemployment is likely to continue to grow at a slow pace as firms are looking less likely to be recruit this year, fewer young Poles will be entering the labour market. Wage pressure is likely to continue as retention of skilled employees continues to be a big worry for firms. Poland’s largest age cohort, born in 1983, has reached the age of 42 this year (around 700,000 people); compare this demographic high-water mark to the number of 22-year-olds, born in 2003 – a mere 350,000. In the long term, the number of labour-market entrants will continue to fall (fewer than 300,000 Poles were born in 2024).

Poland’s unemployment is lowest in the cities and highest in rural areas. More than half of the long-term unemployed live in villages. Big disparities exist between cities where unemployment is extremely low, and new jobs are driven by the shared-services sector (Poznań 1.4%, Katowice 1.5%, Warsaw 1.6%, Wrocław 2.2%, Kraków 2.5%, and Gdańsk 2.9%), and small provincial towns where it remains in double digits. Szydłowiec district, 120km south of Warsaw, also in Mazowsze province, holds the record for Poland at 21.7%. Nearby Radom, a city of 200,000 people, also has high unemployment at 10.1%. New investors might wish to consider university cities such as Szczecin (4.2%), Łódź (5.4%), Rzeszów (4.4%), Lublin (4.5%) or Kielce (5.1%). All data from October 2025.

Unemployment has risen since September in Poznań (by 0.2 percentage points) and in Łódź, Gdańsk and Wrocław (by 0.1 percentage points). In Katowice, Kielce, Kraków, Radom and Warsaw, it has remained at the same level. In Szczecin and Lublin, it has fallen by 0.1 percentage point.

The zloty
Although Poland notionally signed up to join the eurozone as part of its EU Accession Treaty, there was no mention of when, or at what rate. To do so, Poland must alter its constitution, which needs a two-thirds parliamentary majority. So Poland continues to linger on the fringes of the EU’s economic core – and – importantly for its manufactured exports – it can control the competitiveness of its currency. Having said that, the złoty has generally performed strongly against the pound (up 7.1% over the past year) and the dollar (up 12.2%). The euro has held up better, so the zloty is up by only 1.3% over the past year.

The Brexit referendum resulted in a dramatic fall in value of the pound against the zloty. From June to October 2016, the pound fell from 5.60zł to 4.80zł, a 14% drop. Although there was a recovery in 2023-24, over the past 12 months, the złoty has appreciated markedly against the pound, which once again nears to the 4.80z1)ł mark. A stronger zloty makes Polish exports more competitive as well as boosting the UK’s attractiveness as a location for inbound Polish investment. Last year’s high-profile acquisitions of Thomas Cook by eSky and John Menzies News Distribution by InPost show the potential of Polish businesses buying up British brands.

UK-Polish trade

On the surface, Brexit has not hampered trade between Poland and the UK, with the first three quarters of 2025 witnessing new records in the value of goods traded between the two economies. UK exports of goods to Poland in Q1-3 2025 were up by 21%; this now includes significant sales of fossil fuels substituting those Poland used to buy from Russia, as well as defence-related products. That growth needs to be placed into the context of the UK’s shrinking exports of goods to the EU (down 1.0% over the same period) and to the rest of the world (down 2.3% over the same period).

Polish export growth to the UK mainly comes from its larger exporters successfully replacing goods from Western European SMEs which no longer trade with the UK because of frictions arising due to the UK’s departure from the single European market and Customs Union. This has made it much harder for small business to trade profitably with a third country. Anecdotally, however, Poland’s exporters are showing greater determination to stay in the UK market or to enter it than their competitors from Western Europe.

Links:

GUS (Statistics Poland) English-language pages
Central Bank of Poland English-language pages
Eurostat