EBRD Forecasts Poland’s Economy To Grow 3.5% In 2026 Despite Rising Global Economic Risks

The European Bank for Reconstruction and Development (EBRD) has projected that Poland’s economy will continue to grow at a solid pace over the next two years, although external economic pressures are expected to moderate the rate of expansion. According to the bank’s latest Regional Economic Prospects (REP) report, Poland’s gross domestic product (GDP) is forecast to grow by 3.5 per cent in 2026 before slowing to 2.8 per cent in 2027.

The forecast follows a strong performance in 2025, when the Polish economy expanded by 3.6 per cent. The EBRD expects growth to remain relatively robust, supported by strong domestic demand, steady consumer spending, and continued investment activity. Financial support from European Union programmes is also expected to play a significant role in sustaining economic momentum.

One of the key drivers of economic activity in 2026 is the continued use of funds from the European Union’s Recovery and Resilience Facility (RRF). Poland is expected to accelerate the absorption of these funds before the end-August deadline, providing an important boost to investment and development projects across the country.

In addition, rising defence expenditure is contributing to economic growth, with defence spending projected to reach 4.8 per cent of GDP.Poland is also expected to benefit from funding available through the European Union’s Security Action for Europe (SAFE) defence loan programme. This initiative is designed to strengthen defence capabilities across member states while encouraging investment.

The additional financial support is expected to reinforce investment activity and support economic growth in the near term.Despite these positive factors, the pace of economic growth slowed during the first quarter of 2026. According to the EBRD, higher energy prices linked to the ongoing conflict in the Middle East affected business activity and increased costs for both companies and households.

The rise in energy costs created additional pressure on the economy, reducing some of the momentum seen in previous quarters.The report notes that several external risks continue to cloud Poland’s economic outlook. Rising energy prices remain a concern, while ongoing global trade tensions are creating uncertainty for businesses and investors.

At the same time, weaker demand from key trading partners, particularly Germany, is expected to limit export growth and place additional pressure on the economy. As a result of these factors, the EBRD has lowered its growth forecasts for both 2026 and 2027 by 0.2 percentage points compared with the projections it released in February 2026.

The bank has also warned that further escalation of the conflict in the Middle East could create additional challenges. Higher energy prices, disruptions to global supply chains, and increased uncertainty in international markets could negatively affect economic activity. In addition, weaker-than-expected growth across the euro area could further reduce demand for Polish exports and weigh on future growth prospects.

Alongside these external risks, Poland continues to face fiscal challenges despite its relatively strong economic performance. The country currently has one of the largest general government budget deficits among European Union member states. The deficit is expected to narrow only slightly to 6.8 per cent in 2026, indicating that public finances remain under pressure.

Meanwhile, public debt is projected to increase from approximately 60 per cent of GDP to 65 per cent of GDP in the coming years. These fiscal conditions mean that Poland is expected to remain under the European Union’s excessive-deficit procedure.The EBRD noted that the economic outlook for the wider Central European and Baltic region is broadly similar. Regional growth is expected to reach 2.8 per cent in 2026, supported by ongoing investment activity.

However, higher energy costs, geopolitical uncertainties, and weaker external demand have led the bank to revise its regional growth forecasts downward.As one of Poland’s most significant international investors, the EBRD continues to play an important role in the country’s economic development. Since beginning operations in Poland in 1991, the bank has invested more than €16.7 billion through over 590 projects.

Its investments have focused primarily on supporting private-sector development, strengthening energy security, improving infrastructure, and advancing Poland’s transition toward a greener and more sustainable economy.While Poland remains one of the stronger-performing economies in the region, the latest EBRD report highlights that maintaining growth will depend on managing fiscal pressures and navigating an increasingly uncertain global economic environment.