EC: Poland to lead EU growth in GDP per capita

This article is a part of Poland Unpacked. Weekly intelligence for decision-makers

1. Poland will post the highest increase in living standards in 2026...

The chart above illustrates this clearly. In per capita terms, Poland’s real GDP is expected to grow by 3.7%, making the country the top performer in the EU. The next five places are occupied by Central and Eastern European countries. Average real GDP growth per capita across the EU is projected at 0.9%, compared with 1.9% in the United States.

2. ...and again in 2027

The good news does not end there. The pattern is expected to repeat itself in 2027. Although growth in Poland is forecast to ease slightly to 3%, it would still be the highest in the EU. According to the projections, nine out of the ten countries with the fastest per capita GDP growth will be located in Central and Eastern Europe.

3. The Polish economy proves exceptionally resilient

The charts above were based on GDP per capita. In terms of overall real GDP growth, Poland – with projected growth of 3.5% in 2026 – ranks just behind Malta. Poland becomes the leader once demographic changes are taken into account because the country’s population is expected to shrink by 0.2%, while Malta’s is projected to grow by 2.4%.

The most important difference compared with the previous forecasting round is the change in the geopolitical environment linked to the conflict in the Middle East. The shock stemming from higher energy prices is weighing on the economy. The EU growth forecast has been revised down from 1.4% to 1.1%. The European Commission made the largest downward revisions for Sweden (by 0.9 percentage points), Germany and Portugal (both by 0.6 percentage points).

Particularly noteworthy is the sharp downgrade for Romania, where growth was cut by as much as 1 percentage point. It appears that the European Commission did not anticipate such a strong negative impact on economic activity from fiscal tightening introduced while GDP in 2025 remains 1.4% below the economy’s productive capacity. As a result, the region’s recent economic star is expected to stagnate in 2026, with growth of just 0.1%.

Poland, meanwhile, belongs to a narrow group of only three countries whose forecasts have not been revised downward since the autumn projections. The other two are Cyprus and Spain. In Spain’s case, the forecast was even raised by 0.1 percentage points. This does not mean that developments in the Middle East have had no impact on these economies. Rather, the main reason is that incoming economic data since the previous forecast round have been strong enough to offset the negative effects of weaker consumption and tighter monetary policy triggered by the US attack on Iran.

4. The inflation wave will spread widely – but not with the same force as in 2022

In its baseline scenario, the European Commission raised its 2026 inflation forecast from 2.1% to 3.1%. In Poland, inflation is expected to reach 3.6% (measured by the HICP index). This remains relatively high compared with other countries, although it is only 0.7 percentage points above the Commission’s autumn forecast. Once again, stronger disinflationary pressure in Poland in the final quarter of 2025 and the first two months of 2026 plays an important role here.

As during the 2022 episode, the highest inflation is forecast in Central and Eastern European countries. In Romania, inflation is expected to reach as much as 7% - which, combined with the lack of GDP growth, effectively amounts to stagflation. Among the countries seeing the largest upward revisions are the Baltic states, Croatia and Italy.

The shock, however, is expected to be less severe than in 2022. There are several reasons for this. At that time, EU member states were far more dependent on gas imports from Russia. The EU economy entered the current crisis at a more mature and stable stage of the business cycle than in 2021–22, when the post-pandemic recovery was fueling inflation and labor-market pressures. The EU has also significantly reduced its dependence on fossil fuels, partly thanks to the expansion of renewable energy, weakening the transmission of gas prices into electricity prices.

One notable point is the downward revision of Poland’s projected inflation in 2027 by 0.8 percentage points. This results from the postponement of the ETS2 system’s entry into force. Across the EU as a whole, inflation is expected to be 0.3 percentage points higher because of the commodity-price shock.

According to the European Commission, Poland is expected to record the highest budget deficit in the EU in 2026, at 6.5% of GDP. Similar conclusions could already be drawn from the latest government forecasts. However, the Commission’s projection is slightly lower than that of the Polish government, which expects a deficit of 6.8% of GDP.