Business & Economy News Poland

Poland overtakes Portugal in terms of GDP per capita

Warsaw, Poland – Poland is catching up with its neighbours in the West. According to the International Monetary Fund, the GDP per capita in Poland surpassed Portugal’s last year in terms of purchasing power parity (PPP).

Reaching the equivalent of $33,891 in Poland last year, GDP per capita calculated in PPP surpassed that of Portugal, which stood at $33,665. Portugal becomes the second older EU member state Poland overtakes, after Greece in 2016.

The wealth gap between both economies is due to further grow in 2020, with an expected GDP growth of 3.3% and 1.7% for Poland and Portugal respectively this year.

Poland, along with neighbouring Slovakia and Hungary, have among the highest ‘birth rate’ of new companies and businesses in the EU, according to Eurostat figures.

According to IMF experts’ calculations, the Central European country is also expected to become richer than Italy within a decade. Although most analysts see it as mere political rhetoric, current ruling party leader Jaroslaw Kaczynski famously vowed Poland would catch up on EU economic powerhouse Germany by 2040.

Visegrad Group allies Czech Republic and Slovakia – whose capitals rank among the top 10 richest regions in the EU – had already surpassed Portugal in terms of GDP per capita, which now stands respectively at $38,800 and $36,600 nationwide. The two countries appear to be closing the gap on both Italy ($40,400) and Spain ($41,600) more quickly than initially expected by analysts.

According to the European Commission’s latest forecasts, Poland and Hungary are expected to remain among the top 5 fastest-growing economies in the EU, with a GDP growth rate of 3.3% and 3.2% respectively in 2020.

Although outperforming most of the other economies in the bloc, this marks a significant slowdown compared to previous years, as analysts warn that a string of factors – drop in EU funds, a global and EU-wide downturn exemplified by Germany’s barely existing growth, other external factors (Brexit uncertainty, growing international trade tensions, consequences of the coronavirus outbreak, etc.) – could have a serious impact on Central European economies’ growth over the next years.