Macroeconomic overview, end-October 2025

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

Commentary
How’s Poland’s economy likely to fare by the end of 2025? Q2 looks likely to beat Q1 in terms of growth, and the consensus of economists are going for an outcome of between 3.4% and 3.6% for the whole of this year compared to 2024. In July, Poland officially overtook Switzerland to become the world’s 20th largest economy.

Wages continue to grow ahead of prices, leading to rising retail sales, with industrial output has returned to positive territory. Public- and private-sector investment is rising strongly, driven by EU-funded industrial modernisation in defence, infrastructure projects and green energy.

Poland’s economy did better than expected last year, with GDP growing by 2.9%. Inflation peaked at 5.0% in March 2025, dipping by September to 2.8%. The National Bank of Poland responded to the faster-than-expected fall in inflation by cutting the base rate three times from 5.5% in the spring to 4.5% today).

Wage inflation remains stubbornly high; recruitment and retention is a major issue for employers. However, rising real wages are making their way through to retail sales.
Manufacturing industry, however, has returned to a six-month run of negative PMI readings after three months with a score above 50. 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 September 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. Overall 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.

The politically driven minimum wage is seen as problematic by manufacturers with large blue-collar workforces. From 1 January 2025, the statutory minimum wage rose by a further 8.5% from 4,300 zł a month gross to 4,666 zł (from 1 July 2024), and up 10.0% from the 4,242 zł it was on 1 January 2024. The next increase, scheduled for 1 January 2026, will see the minimum wage raised by just 3% to 4,806 zł.

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.

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 seventh-largest export market and third-largest import source; last year, Poland had a $5.9 billion deficit in trade in goods with the US. How this will ultimately be affected by the unpredictable tariff war is as yet incalculable.

Overall trade in goods for the first half of 2025 show Poland with a tiny deficit of €2.4 billion, with the value of goods exported falling faster than that of imports. In H1 2025, the UK was Poland’s only Top Six export market to have grown in value (up by 0.3% in złoty terms) whilst the value of exports to Germany, Czechia, France, Italy and the Netherlands fell by between 5.2% and 0.4%.

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, reaches 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. 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 (Poznań 1.2%, 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 September 2025.

Unemployment has risen since March in Łódź (by 0.9 percentage points), Szczecin (by 0.7 percentage points), Wrocław (by 0.4 percentage points) in Katowice, Kraków, Kielce and Rzeszów (by 0.3 percentage points), Warsaw, Gdańsk and Lublin (by 0.2 percentage point). In Poznań it has remained at the same level since the spring.

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 core – and – importantly for its manufactured exports – it can control the competitiveness of its currency. 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 4.80z 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 the second quarter of 2025 witnessing yet another record in the value of goods traded between the two economies, and August 2025 nudging £1.3 billion – one month’s trade equalling the total for Polish goods exported to the UK in 2003. Looking the other way, UK exports of goods to Poland in Q2 2025 also broke records; this now includes significant sales of fossil fuels substituting those Poland used to buy from Russia, as well as defence-related products.
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.

Links:

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