The year 2024 is behind us, and it is time to assess the situation and look at the outlook for 2025. Economists rely on data and statistics, so let’s take a glance at the portal of the Central Statistical Office.
A first look at the Economic Dashboard shows that 2024 brought a slight uptick in business sentiment, known as the synthetic economic sentiment index. However, its values remain below 100, indicating a predominance of negative forecasts. Similarly, consumer confidence improved in 2024, although the outlook remains negative.
More information comes from the Macro-Economic Data Bank. The Gross Domestic Product (GDP), which is the sum of goods and services sold, grew in the first three quarters of 2024 faster than inflation and quicker than in 2023. This growth, in the range of 2-3% after adjusting for inflation, places Poland at the forefront of countries in the region. However, it is essential to remember that such growth rates are typical for developed economies and indicate stabilization rather than growth. Additionally, significant limitations for growth prospects are labor market shortages. Thus, for Polish businesses, 2025 promises to be a continuation of hard work to maintain growth.
Worrying observations arise from an analysis of fiscal policy: the government spent 240 billion zlotys more than it collected in taxes in 2024. Already, every third zloty spent on public needs comes from debts incurred by our country. Moreover, half of these needs are met in international markets, where the government has little room to maneuver if it faces repayment issues. The deficit for 2025 will be even larger, nearly 290 billion zlotys. Such figures have not been recorded in Poland even during the pandemic. We would have to go back to the crisis years of 2008-2009; however, then the deficit was justified by protecting the economy. In contrast, today’s deficit results from declining tax revenues while maintaining expenditures. Therefore, lean years are ahead for public services such as education and health.
Thus, 2025 appears to be a year of hard work with limited resources. It is no surprise that we observe increasing consolidation, meaning the dominance of large enterprises. In the media, we can hear complaints from small entrepreneurs and learn about conflicts between larger ones. In city streets, amphibians dominate, pushing out local shops, while in smaller towns, relatives' discount stores and four-letter markets are a constant element of the landscape. Pharmacies are also disappearing, giving way to chains. A spectacular battle is taking place in the currency exchange market, where banks use financial oversight to stifle domestic service Cinkciarz.pl by attacking Conotoxia Sp. z o.o.
Polish entrepreneurs should therefore prepare for a demanding year in 2025 and closely monitor competition.
We have written about strategies whose persistent implementation can bring benefits together with Prof. Yochanan Shachmurove (City University of New York) in our book "Strategic Response to Turbulence," which will be published, as you might guess, in January 2025.
