Poland defies the slowdown

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

Poland’s economy is set to expand briskly compared with the EU’s largest markets, according to the International Monetary Fund’s World Economic Outlook. Paradoxically, the outlook is stronger than forecast just six months ago. This reflects a recalibration of projections after a robust end to 2025. The global economy, however, remains weighed down by the conflict in the Middle East.

How do real GDP growth projections look across the world’s largest economies? The table below compares figures from the two previous forecasting rounds with the latest estimates.

Global GDP growth is projected at 3.1% in 2026 – 0.2 percentage points lower than the International Monetary Fund had forecast three months ago. The current outlook is unchanged from six months earlier, but more pessimistic than in the January round.

This downgrade is, of course, driven by the war with Iran triggered by the United States and Israel. Absent this shock, the IMF estimates that global growth would have reached 3.4% - that is, higher than in the January forecast.

Scenario uncertainty, but inflation rises

The International Monetary Fund has prepared three forecasting scenarios. The figures cited above correspond to the baseline scenario, which assumes a short conflict lasting a few weeks. Under this assumption, energy commodity prices are expected to rise by 19%. The average annual oil price in 2026 would reach USD 82 per barrel. Higher fertilizer prices and transport costs would, in turn, push up food prices. In this scenario, global inflation is projected at 4.4%, up from 4.1% in 2025.

In the most adverse scenario, involving a prolonged conflict, oil prices would reach USD 110 in 2026 and rise further to USD 125 the following year. Global inflation would hover close to 6% in both years, while world GDP growth would slow to just 2.5% this year.

Of course, the IMF has no privileged information on how long the conflict will last. The wide range of projections reflects the scale of uncertainty. In the remainder of this analysis, I focus on the baseline scenario – but it should be borne in mind that this is the optimistic case.

Losers – and the fewer winners – of the war

Not all countries “suffer” equally from the situation in the Middle East. A simple comparison of forecasts from the start of the year and April reflects not only the conflict, but also new data coming in from individual economies. Even so, as a first approximation, the current downward revisions largely stem from the war in Iran.

Russia is an unmistakable beneficiary, gaining from higher oil prices and a partial easing of U.S. sanctions. This is reflected in an upward revision of its GDP growth forecast from 0.8% to 1.1%. At the opposite end are Saudi Arabia and other Gulf states. In January, the International Monetary Fund expected Saudi growth of 4.5%. Iranian strikes on the country’s infrastructure, heightened investment uncertainty and subdued consumption have led to a downward revision to 3.1%.

Among the major economic blocs, growth forecasts have also been trimmed for China and the United States – by 0.1 percentage points relative to January, to 4.4% and 2.3% respectively. The euro area – and Germany in particular – is set to be hit harder, given its reliance on imported raw materials.

Poland: a leader of growth…

Poland is set to retain its status as the fastest-growing economy among the EU’s large markets. The GDP growth forecast for 2026 has been revised up by 0.2 percentage points compared with the October round, to 3.3%. This largely reflects stronger incoming data since the previous forecast, adjusted for the negative impact of the Middle East conflict. In simple terms, the former factor has outweighed the latter.

Among the EU’s eight largest economies, relatively robust growth (above 2%) is also expected in Spain and Sweden. Other major economies are set to expand below the EU average. A full breakdown for EU countries is presented below.

…and of the deficit

At the same time, the International Monetary Fund has updated its fiscal projections for 2026. Public debt as a share of GDP is expected to rise from just over 65% in 2026 to 78% by 2032 – broadly in line with previous forecasts. However, IMF data still show a lower deficit for last year than the figure recently reported by Statistics Poland.

In 2026, Poland’s deficit is projected by the IMF at 6.7% of GDP, slightly above the 6.5% assumed in the budget law – and the highest in the EU, ahead of Romania. That country, however, faces a particularly difficult outlook: even under the IMF’s optimistic scenario, GDP growth is expected to reach just 0.7%, while average annual inflation could climb as high as 7.7%.

Inflation on the rise in the EU

How large is the expected inflation shock in the EU as a result of developments in the Middle East? Across the bloc, inflation is projected to be 0.6 percentage points higher than forecast in October 2025. For Poland, the increase is similar, at 0.5 percentage points (from 2.8% to 3.3%).

Poland is set to retain its position as the fastest-growing economy among the EU’s large markets. The GDP growth forecast for 2026 has been revised up compared with the October 2025 round, to 3.3%, reflecting strong data at the end of last year. Growth would have been even stronger were it not for the Middle East conflict. In 2026, Poland is also projected to record the highest fiscal deficit in the EU (6.7% of GDP). Public debt is expected to rise from 65% of GDP in 2026 to 78% in 2031.
Current macroeconomic forecasts are closer to those from six months ago – hence more pessimistic than at the start of the year. This reflects the ongoing conflict in the Middle East. In the most optimistic scenario, global GDP growth is expected to reach 3.1% in 2026, 0.2 percentage points lower than the International Monetary Fund projected six months ago.
Among the major economic blocs, growth forecasts have been revised down for China and the United States – by 0.1 percentage points relative to January, to 4.4% and 2.3% respectively. The euro area – and Germany in particular – is set to be hit harder due to its reliance on imported raw materials. Russia, meanwhile, is a clear beneficiary of the war, gaining from higher oil prices and the partial easing of U.S. sanctions.