Poland's economic transformation over the past few decades has been impressive, but reforms are necessary to maintain its growth momentum, International Monetary Fund (IMF) officials told Reuters.
 
“Poland is one of the great economic growth success stories in the world over the last 30 years,” said Geoff Gottlieb, IMF senior regional representative for Central, Eastern and South-Eastern Europe. 
 
Poland's relatively low public debt level, solid history of economic growth, and the government's commitment to achieving a significant fiscal consolidation in a short timeframe have all enhanced the country's fiscal credibility, according to Gottlieb. 
 
Earlier this month, Poland announced plans to reduce its budget deficit to below the European Union's limit by 2028 and to lower its debt-to-GDP ratio by 2030, Reuters reports. 
 
“We think that the amount of adjustment should just be more front-loaded when growth is strong, when inflation is still high and to establish credibility about the whole package,” Gottlieb stated. 
 
“It's always economically and even politically easier to do fiscal adjustment when growth is high.”
 
The IMF projects that Central and Eastern Europe's largest economy will grow by 3.5% next year, while Poland anticipates a growth rate of 3.9% in 2025, an increase from the expected 3.1% in 2024. 
 
Gottlieb added that any additional revenue generated in the 2025 budget should be saved to further reduce the deficit beyond the targeted amount.
 
However, IMF officials noted that there are challenges to medium-term growth.
 
“We have this strong growth record going back. Convergence is happening, has been happening, but it also means that there is less catching up left. So it will be harder to grow as much going forward,” said Jan Kees Martijn, IMF mission chief to Poland. 
 
He also highlighted the aging population, increased military spending, and essential climate investments as significant pressures on the budget, stressing that the IMF is committed to ensuring fiscal sustainability. 
 
One potential solution, according to the IMF officials, would be to more effectively target Poland's universal social benefits, such as the previous government's prominent 800 zloty ($200.39) monthly child allowance and the electricity price cap.
 
Furthermore, after an official staff visit to Poland, the IMF recommended in a report last week that the country raise income, property, and value-added taxes to levels comparable to those in other EU countries, along with aligning the retirement age for men and women and gradually adjusting it over time to reflect increases in life expectancy.