Poland - Country Partnership Framework for the Period FY2026-FY2031 Annex V - Streamlined 2024 Systematic Country Diagnostic Update - V

Jul 19, 2026

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Streamlined 2024 Systematic Country Diagnostic update for Poland assesses progress since the 2017 Systematic Country Diagnostic (SCD-1) and revises priority areas to match emerging challenges and opportunities for inclusive, sustainable growth. The update highlights resilient GDP growth despite COVID-19 and the Ukraine war, while fiscal pressures, persistent low private investment, technology adoption gaps, and incomplete income convergence with the EU remain key constraints. It also examines slower inclusion progress, labor market integration barriers, and spatial disparities across regions.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages10

Reading Time25 min

Progress Since 2017 and Emerging Trends

Economic Growth Has Been Resilient, but Full Income Convergence Requires Overcoming Structural Challenges

Advancing Inclusion Requires Greater Emphasis on Labor Market Integration, a Dynamically Progressive Fiscal System, and Containing Spatial Disparities

Public Disclosure Authorized Pub lic Disclosure Authorized V. Streamlined 2024 Systematic Country Diagnostic Update for Poland10 This document is provided for reference as a summary of the 2024 Update of Poland's Systematic Country Diagnostic (originally published in 2017). Most data referenced in the report dates from 2021–2022, with selected 2023 figures on energy. Some indicators, such as air pollution costs (2016) and R&D investment peaks (2019), reflect older reference years. 1. Progress Since 2017 and Emerging Trends The Systematic Country Diagnostic (SCD) Update examines challenges and risks to Poland’s inclusive and sustainable growth model, assessing progress since the last SCD in 2017. The initial SCD (SCD-1) highlighted Poland's need for a revised strategy to sustain rapid, inclusive growth, focusing on a strategic, effective, and accountable state. Key challenges included rapid aging, institutions facing capacity challenges, regional disparities, external vulnerabilities, technological impacts on labor, and resource pressures. SCD-1 proposed three pathways: boosting productivity, enhancing inclusion, and ensuring sustainability, with nine priority policy areas. Progress in these areas has been mixed, with some advancements, limited progress, or reversals, and new challenges emerging. The SCD Update revises these priority areas to address current challenges and opportunities for Poland's continued growth. 1.1 Economic Growth Has Been Resilient, but Full Income Convergence Requires Overcoming Structural Challenges Since 2017, Poland has demonstrated resilient economic growth despite facing significant external shocks, including the COVID-19 pandemic and Russia’s invasion of Ukraine. The pandemic led to a mild recession in 2020 (-2 percent), Poland’s first since 1991, but the country recovered quickly. The invasion introduced new challenges, such as energy price shocks, increased inflation, and an influx of displaced persons. Still, between 2016 and 2022, Poland maintained an average gross domestic product (GDP) growth rate of 4.1 percent, surpassing its estimated potential growth of 3.5 percent and improving on the 3.1 percent average of 2010–2015. Growth was mainly driven by private consumption, followed by investment and government spending, underpinned by a diversified economy and macroeconomic stability supported by European Union (EU) governance frameworks. However, fiscal pressures have mounted since 2020 due to pandemic-related support measures, the energy crisis, and defense spending. Budget deficits have averaged more than 3.5 percent of GDP, and public debt is projected to remain above pre-COVID levels, stabilizing around 50 percent of GDP. Reforms to the personal income tax system have further reduced revenue by about 1 percent of GDP in 2022– 2023. Spending pressures are also elevated by continued support to Ukrainian refugees, high inflation, and rising interest payments. Inflation surged to 14.4 percent in 2022, up from 5.1 percent in 2021 and well above the previous decade’s average of 1.8 percent. Although disinflation is in progress, inflation is expected to stay above the target range (2 .5 percent ±1 percent) until at least 2025. Rising living costs have eroded real incomes, with vulnerable groups affected most, even though government measures have softened the blow, especially in terms of energy costs. A persistent challenge is Poland’s low level of private investment, which remains below the EU average. In 2022, over half of investment went into physical infrastructure, while less than 10 percent was directed toward intangible assets like research and development (R&D) and intellectual property. This limits the country's ability to move up the value chain. Technology adoption among businesses also lags EU average, 10 Poland-Systematic Country Diagnostic Update: Reaching the Last Mile of Convergence; June 2024. 14 Official Use Only particularly among small and medium-size

FAQs

What purpose does the Streamlined 2024 SCD update serve for Poland?

It summarizes the 2024 update of Poland’s Systematic Country Diagnostic, reviewing progress since the 2017 SCD-1 and revising priority policy areas to reflect current challenges and opportunities for inclusive and sustainable growth.

How has Poland’s economic performance changed since 2017 according to the update?

Poland maintained resilient GDP growth despite shocks from COVID-19 and the Russia-Ukraine war, but fiscal pressures increased and full income convergence with the EU remains incomplete.

What inclusion and labor-market issues does the update emphasize?

It notes slower progress on poverty reduction, rising income inequality, uneven labor market participation across demographics, limited childcare enrollment for young children, and difficulties faced by older workers.

Jul 19, 2026

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