Fitch downgrades Poland GDP growth forecast to 0.7 pct

Fitch downgrades Poland GDP growth forecast to 0.7 pct

The global ratings agency Fitch has downgraded Poland's GDP growth forecast for this year to 0.7 percent from 1.1 percent expected earlier in the year.

In its latest forecast, Fitch maintained its earlier prediction of 2.6 percent economic growth in 2024.

Fitch wrote a better outlook for the Polish economy because of the fact that the energy crisis in Europe is less severe than expected and energy commodity prices falling significantly. We forecast growth of 0.7 percent for the whole year, instead of the 1.1 percent we expected in December. Fitch predicts domestic demand will remain weak because high inflation has eroded real incomes and slowed consumer spending. The current level of Poland's reference interest rate, which is 6.75 percent, has had a negative impact on household spending and business investment decisions.

The ratings agency said that overall investment will increase in 2023 due to a significant inflow of foreign direct investment - PAP and an expected increase in public spending particularly on defence.