Poland’s economy has reached a historic milestone: its GDP has surpassed one trillion US dollars, placing it among the world’s twenty largest economies. While Warsaw proudly celebrates—with Prime Minister Donald Tusk declaring that this is “certainly not our last word”—international institutions are increasingly vocal about rising fiscal risks. How did the Polish economy reach this point, and what challenges lie ahead in sustaining its growth?
Warsaw is striking. The cool September sky reflecting off the Centre’s towering skyscrapers can transport the passer-by straight to Manhattan. Walking its streets, one might easily forget they are in Central Europe. Powiśle, Frascati, Filtry, Młynów—Brooklyn, Astoria, the Bronx, and Queens. Yet Warsaw is also deceptive. Recent years have brought intriguing developments: public dissatisfaction, soaring prices, the most expensive energy in Europe. And yet renovations are underway, families stroll calmly around the Sejm, and Bolt taxis still take passengers from A to B—albeit not at 2021 prices. Warsaw’s Janus face is not unique; it is visible wherever one travels in Poland.
Poland’s economy has recently crossed the dream threshold of one trillion dollars. In doing so—overtaking Switzerland—it has climbed into the world’s top 20 economies, and in Warsaw, it is already being spoken of alongside the G20. For comparison: only around twenty nations can boast a GDP of this magnitude, making Poland’s achievement genuinely exclusive. Prime Minister Tusk hailed the milestone as an absolute historic success, emphasising, “this is not our final word.” GDP is currently growing at roughly 3.4%—one of the fastest rates in Europe—which is being felt in the wallets of ordinary Poles. It is no coincidence that Tusk claimed Poland is now “unbeatable in growth,” suggesting that his country is outpacing even the continent’s largest economies. According to OECD data, between late 2023 and early 2025, Poland recorded the fastest growth in real income per capita in the developed world, meaning Polish households’ purchasing power is rapidly converging with Western levels.
A Race with Russia?
In 2023, for the first time, the value of Polish exports exceeded that of Russia’s—a symbolic turning point for the region. Russia’s longstanding structural weaknesses—reliance on energy exports, limited economic diversification—and the sanctions imposed following the war in Ukraine are constraining Moscow’s growth. Poland, by contrast, is strengthening steadily, drawing on the advantages of EU membership, a broadening industrial base, and rising productivity. According to long-term forecasts by the fintech company XTB, if this trend continues, the Polish economy could overtake Russia’s in size within a few decades. They anticipate such a reversal around the middle or end of the century—though further reforms and investment will be required. Of course, Poland faces its own challenges (including adverse demographics and lagging innovation rates), but these issues appear more manageable than the risks clouding Russia’s future. Poland therefore stands a strong chance of surpassing its eastern neighbour economically and geopolitically in the coming decades—despite having only one-third of its population.
Robust Growth, Rising Risks
This spectacular growth, however, has a darker side. The budget deficit may approach 7% of GDP this year, and the Warsaw government forecasts a deficit of around 6.5% next year—more than double the EU’s 3% threshold. The public debt ratio is climbing sharply, and if current trends continue, it could approach 70% of GDP by the end of the decade. Unsurprisingly, credit rating agencies have issued warnings: early in the autumn, Moody’s downgraded Poland’s outlook to negative for the first time in twenty years, and only weeks earlier Fitch had taken similar action. The rationale was the same: rising deficits threaten to make the fiscal path unsustainable. Moody’s predicts this year’s deficit could reach 6.8% of GDP and remain above 6% next year, raising the spectre of rapidly swelling debt. Fitch has warned that without corrective measures, Poland may eventually lose its current “A” rating, resulting in more expensive borrowing.
Yet the underlying fundamentals of the economy remain strong. GDP growth this year may exceed 3%, and next year the EBRD expects 3.5%, thanks to falling inflation and a revival in public investment. The Polish central bank also expects momentum to be maintained through the second half of 2025, though a slowdown is likely in 2026—particularly if conditions fail to improve in Poland’s main export market, Germany. Due to stagnation in the German economy this year, Poland’s net export contribution is already negative. The regional picture is mixed: Poland’s growth may outpace the Central European average (estimated at around 2.4% by the EBRD), while several neighbours (such as Hungary) struggle with high inflation and stalled economies. Poland’s success model thus relies largely on its internal strengths, but external risks—war, trade tensions—could slow the momentum at any time.
A Political Shadow Over the Economy
Credit rating agencies have also highlighted another risk: domestic political tensions. According to Moody’s, the principal danger lies in the open conflict between the Polish government and the new head of state. Conservative President Karol Nawrocki, who took office in 2025, and Tusk’s centrist-liberal cabinet hold diametrically opposed stances on numerous issues, resulting in deadlock. Outlooks are further clouded by the approach of the 2027 elections, with expectations that the government will boost spending to win over voters—placing political-cycle pressure on the budget. All this is occurring just as Poland embarks on record defence investments in response to wartime threats, further straining public finances. Should domestic political strife undermine institutional stability, economic confidence could be easily shaken—something Warsaw cannot afford to ignore.
Poland’s G20 ambitions are thus within tangible reach, but remaining at the summit will be harder than getting there. Despite remarkable achievements in exports and GDP, the coming years will test whether the country can preserve macroeconomic balance and political stability. If it succeeds, Poland may not only remain a proud member of the “trillion-dollar club” but emerge as Central Europe’s leading economic power. If not, the current warning signs suggest that rapid convergence may prove fragile indeed.