In an era of existential economic despair across the EU, one of the larger EU member states is posting consistently positive numbers: Poland.
The GDP growth rate of about 3% for 2024 puts Poland ahead of the EU’s overall rate of 1%, even above the bloc’s two largest economies, France and Germany. France recorded a rate of 1.2%; Germany suffered a -0.2% contraction.
The signs for 2025 are also positive. Poland recorded growth of 0.8% in the second quarter, the fifth-best rate in the EU. Growth is estimated at about 3.3% this year, with a 3% rate expected for 2026.
Poland did not become an economic success story overnight. Since joining the EU in 2004, Poland’s average annual GDP growth has been about 4%, a rate that has accelerated substantially over the past decade.
Still, there is a special momentum at this time. Poland’s stock market is rising, and there is growing optimism about its potential to become one of the European Union’s strongest and most dynamic economies.
“Over the past two decades, Poland has definitely done better,” Katarzyna Rzentarzewska, chief macro analyst for Central and Eastern Europe at Erste Group, told DW.
“Real GDP doubled,” Wrzesntrzewska said. “This is something outstanding. Obviously, it is part of the process of convergence, but overall, Poland looks different.”
‘Poland is big’
Jacob Funk Kirkegaard, non-resident senior fellow at the Peterson Institute for International Economics, told DW that Poland’s success is mirrored to some extent by other Eastern EU and Baltic states, but the country’s size is a key difference.
“Poland is bigger,” he told DW. “So it really matters, if you like, at the overall EU level – in a way that it doesn’t in a much smaller economy – politically and in terms of economic weight.”
Poland has a population of 37 million, the fifth largest in the European Union. Its economy now ranks among the top 20 in the world in terms of GDP.
Poland’s growing economic strength is also linked to its strategic and geopolitical importance. In recent years, Poland has increased defense spending to such an extent that it is now number 1 in NATO in terms of the share of GDP spent on defense, which is currently about 4.5%.
Most defense spending is on foreign orders rather than domestic production, but, Rzentarzewska said, much of Poland’s growth is driven by domestic private consumption rather than exports.
“This is a pillar of growth,” he said, noting that Poland’s strong domestic market can be seen in its low unemployment and real wage growth. This also gives it the ability to remain relatively safe from external shocks.
“When you see a global recession, obviously the smaller, export-oriented economies are hit first because that’s how the value chain works,” he said. “In Poland’s relatively closed economy, consumption remains strong.”
a model of integration
So what exactly has Poland done right? Razenterzewska said that its successful integration into the EU, NATO, the Schengen Area and the OECD was key to its success.
“If we look at the broader concept of integration, Poland did it really well,” he said. Although it has not joined the eurozone, it has benefited from extensive EU financing since joining the bloc in 2004.
“We cannot deny that access to European funds was huge – a major contributor to growth,” he said.
Kierkegaard said Poland had “got the basics right”.
“They have used EU funding to significantly improve their infrastructure,” he said. “They have completely eliminated the street-level corruption that was rampant during the communist years. They have basically succeeded in creating a very welcoming business environment. They have a generally well-educated workforce.
“Poland is a poster child for successful EU integration. They needed to get it right because they’re so big. And they got it right.”
Political divisions threaten EU wealth
There are possible adverse circumstances. Over the past two decades, Poland has been politically divided between a large right-wing faction led by the national-conservative Law and Justice (PiS) party and a liberal faction, currently led by Prime Minister Donald Tusk’s Civic Coalition.
Tusk’s coalition is more pro-EU, and his group’s victory in the 2023 parliamentary elections was seen as helpful in securing long-term EU funding for Poland, given that Law and Justice had regular disputes with Brussels over judicial independence when it was in power.
A victory by PiS-backed Euroskeptic Karol Nawrocki in the 2025 presidential election was seen as potentially damaging to Poland’s future EU relations.
A few weeks after taking power in 2023, Tusk was able to convince the European Commission to release €137 billion of funding, provided he brings Poland’s justice system back in line with EU norms and rules.
Tusk’s efforts to consider the possible removal of judges appointed during PiS’s period in government are bringing him into direct conflict with Nawrocki.
Still, Wrzesntrzewska said, despite Poland’s political divisions, the country has made economic progress under both factions. “Poland is a good example of how you can have progress and dynamic development under different political parties or orientations, whether it’s conservative or more liberal,” he said.
New Germany?
Wrzesntrzewska said that increases in welfare spending, such as child benefits introduced by Law and Justice, have been beneficial and helped boost the economy.
He cautioned that excess spending, combined with increased defense spending and inflation, has contributed to a tight fiscal situation in Poland.
According to recent plans presented by Finance Minister Andrzej Domanski, Poland’s government deficit will amount to 6.5% of GDP in 2026.
Rafal Benecki, Poland’s chief economist at ING, said the country’s strong growth rates mean rating agencies and investors are generally not worried, but he believes “a concrete fiscal adjustment plan is needed to boost confidence.”
Wrzesntrzewska said: “Poland will need to deal with this. It will need to go through fiscal consolidation, fiscal austerity, and this is naturally something that could slow down growth.”
But, Rezentarzewska said, the current climate of confidence is justified. “Low unemployment rates, consumer confidence and, importantly, higher productivity – all of these enhance the overall sentiment, positive sentiment and performance of the economy,” he said.
Kierkegaard said Poland could teach the rest of the EU a lot about economic dynamism and resilience.
“There was a time when Michigan and what is now the ‘Rust Belt’ in the United States was an economically dominant part of the American economy,” he said. “That’s not the case now.
“But if you assume that Germany is unable to reform itself and Poland continues to perform the same way it has since becoming an EU member 20 years ago, it will eventually eclipse the likes of Germany, which could become like the rust belt of Europe.”
Edited by: Christy Pladson