Poland

Modest acceleration

The growth rate of the Polish economy is set to accelerate in 2025 following an already solid pace in 2024. Its main growth driver will be investment from the state and state-owned enterprises, stemming from a larger absorption of EU funds. 2025 will see the highest inflow of funds to Poland from the current EU budget plan (2021-2027) and ?the NextGenerationEU Recovery and Resilience Facility (2021-2026) amounting to 4-5% of the previous year’s GDP over the period. Additionally, local governments, which are also to benefit, are expected to increase their capital expenditures, as projected in their mid-term budget plans and as indicated by their currently high deposit levels. However, private sector investment is likely to be more subdued due to high financing costs, compressed margin rates, and the conclusion of the real estate-specific programme ("Bezpieczny kredyt" – “Safe Credit”). Private consumption is expected to contribute significantly to the growth rate. Following a period of rebuilding real savings, households are now able to allocate a higher share of their income to consumption. Therefore, even though real earnings will not grow as rapidly as in 2024, consumption growth should remain robust. Last, net export should be a drag on the Polish economy given the weak outlook for Germany’s economy, the latter being a key trading partner.

After substantial disinflation from 11.4% in 2023 to 3.6% in 2024, inflation in Poland is projected to experience a moderate uptick in 2025. This temporary acceleration, expected to peak in H1 2025, will be primarily driven by the unwinding of electricity price controls and VAT rate normalisation. The latter is particularly significant given the low base effect created by the temporary 0% VAT rate on food products in Q1 2024. However, this inflationary episode should prove transitory within the broader disinflationary trend, supported by continued normalisation across global energy commodity markets. Nevertheless, structural factors including labour market tightness, sustained fiscal expansion and broader economic growth momentum will maintain underlying price pressures and most likely postpone convergence with the central bank's inflation target out to 2026.

Following a period of stable interest rates and a key policy rate of 5.75%, monetary easing is expected to resume in late 2025. Despite mixed signals from the ECB’s Governor, the key catalyst for policy adjustment will emerge in Q2 2025, when declining inflation and forecasts will lead to rise in real interest rates, resulting in de facto monetary tightening. This dynamic is likely to prompt the Monetary Policy Council to implement rate cuts to maintain optimal policy. The initiation of monetary easing in late 2025 would align the rate-cutting cycle with the projected convergence of inflation to the central bank's target in 2026, resulting in neutral monetary policy conditions in real terms.

Balancing deficit reduction and defence expenditures

Subject to the EU Commission’s excessive deficit procedure, Poland is projected to reduce its deficit modestly in 2025 through back-loaded fiscal consolidation. After the budget deficit reached a record high in 2024, we expect it to decrease slightly, aligning closely with the 5.5% forecast in the Ministry of Finance's mid-term plan. The minor difference reflects a slightly more optimistic growth forecast assumed in the budget plan. Defence spending will continue to be a substantial drag on the budget and is expected to reach a record 4.7% of GDP. The excessive deficit procedure expects the deficit to reach levels below 3% within a four-year horizon. This fiscal trajectory is feasible unless a major geopolitical event or macroeconomic setback materialises.

The current account balance is projected to expand its record deficit in 2025, driven by several macroeconomic factors. Sluggish economic growth among key trading partners in Western Europe (notably Germany and France) and the Central European region (Czech Republic) will damp external demand. Conversely, imports are expected to rise due to robust domestic investment rebound. Moreover, unprecedented defence spending will significantly amplify aggregate imports, particularly given the import-intensive nature of defence procurement in Poland.

Potential electoral win to strengthen coalition's legislative power

The governing coalition is now at the midpoint of its four-year term and is grappling with significant challenges arising from internal ideological differences and presidential vetoes. The president's use of veto power has obstructed several key legislative initiatives, resulting in political gridlock. Moreover, the coalition's diverse composition has further complicated decision-making, with securing sufficient support for consensus on key policies proving increasingly difficult. This is particularly evident in respect of contentious social issues such as abortion. Consequently, the government and its coalition partners have struggled to make good on all their electoral promises.

However, these challenges may be mitigated following the upcoming presidential election in May 2025. Barring a surprise, the coalition’s candidate, the current Mayor of Warsaw, Rafa? Trzaskowski, is widely expected to secure victory. Several factors favour his candidacy over that of the opposition’s PiS candidate. With the incumbent President nearing his constitutionally final term, he will be unable to replicate his narrow win over Trzaskowski in the 2020 presidential election. In response, PiS has introduced a new candidate, Karol Nawrocki, a relatively unknown figure in politics. His lack of political experience, combined with far-right candidates softening their rhetoric towards more centrist position to attract a share of PiS electorate, has damaged PiS’ position in the polls, making Trzaskowski the clear frontrunner. Despite the formal political independence of the presidency, an anticipated victory for Trzaskowski is expected to strengthen the current coalition's legislative power, facilitating a more effective implementation of its policy agenda.

From 1 January to 30 June 2025, Poland will preside over proceedings of the Council of the European Union. In his opening speech, Polish Prime Minister Donald Tusk outlined his priorities, which focus on the commonly accepted security pillars. This includes EU defence, the stability of EU borders, and Poland’s energy security. Additionally, the presidency allows Poland to take a larger role in the reconstruction of Ukraine after the war ends. Although the Polish presidency spans only the first half of the year, the government is expected to be active, given Prime Minister Tusk's extensive experience in European institutions. The new government’s proactive European attitude was also instrumental in the unfreezing of EU funds at the beginning of 2024.

Payment

Standard bills of exchange and cheques are not widely used, as they must meet a number of formal issuing requirements in order to be valid. Nevertheless, for dishonoured or contested bills and cheques, creditors may resort to fast-track procedures resulting in an injunction to pay. There is, however, one type of bill of exchange that is commonly used – the weksel in blanco. This is an incomplete promissory note bearing only the term “weksel” and the issuer’s signature at the time of issue. The signature constitutes an irrevocable promise to pay, and this undertaking is enforceable upon completion of the promissory note (with the amount, place, and date of payment), in accordance with a prior agreement made between the issuer and the beneficiary. Weksels in blanco are widely used as they also constitute a guarantee of payment in commercial agreements and the rescheduling of payments.

Cash payments were commonly used in Poland by individuals and firms alike, but under the 2018 Business Law Act (Ustawa – Prawo przedsi?biorców), companies are required to make settlements via bank accounts for any transaction exceeding the sum or equivalent of 15,000 Polish z?otys even when payable in several instalments. This measure has been introduced to combat fraudulent money laundering.

Bank transfers have become the most widely used payment method. Following phases of privatisation and consolidation, Polish banks now use the SWIFT network.

Debt Collection

Amicable phase

Amicable debt collection is the first step of the debt recovery procedure in Poland. These actions include reminders and/or demands for payment. These communications usually serve to obtain repayment of outstanding debt, to warn the debtor of further official actions, to obtain acknowledgment of the debt, to conclude an agreement between the creditor and the debtor based on the acknowledgment of its debt and to obtain a commitment to the repayment agreed.

As of 2004, interest can be claimed as from the 31st day following delivery of the product or service, even where the parties have agreed to longer payment terms. The legal interest rate will apply from the 31st day until the contractual payment date. Thereafter, in the case of late payments, the tax penalty rate will apply. This is very often greater than the legal interest rate, unless the contracting parties have agreed on a higher interest rate.

A bill to implement the 2011/7/EU directive of 2011 on “combating late payment in commercial transactions” provides the contracting parties with maximum payment terms of 60 days. Similarly, default interest is due the day after the deadline, without the need for a formal notice. By implementing the EU Directive, Poland introduced new rules regarding compensation for payment defaults in commercial transactions. These rules oblige debtors to pay the costs of recovery when the payment term expires. The defined amount is a lump sum of €40 – but it is possible to demand a larger amount if the costs of recovery prove to be higher.

Legal proceedings

Fast-track proceedings

Creditors can seek an injunction to pay (nakaz zaplaty) via a fast-track and less expensive procedure, provided they can produce positive proof of debt (such as unpaid bills of exchange, unpaid cheques, weksels in blanco, or other acknowledgements of debt). If the judge is not convinced of the substance of the claim – a decision he alone is empowered to make – he may refer the case to full trial.

As since 2010, the district court of Lublin has jurisdiction throughout Poland to handle electronic injunctions to pay when claims are indisputable. The clerk of the court examines the merits of the application, to which is attached the list of the available evidence. He then, using an electronic signature, validates the ruling granting the injunction to pay. This procedure appears, at first glance, to be fast, economic and flexible, but in reality the sheer number of cases mean that this process can be slow and drawn out.

Ordinary proceedings

Ordinary proceedings are partly written and partly oral. The parties file submissions accompanied by all supporting case documents (original or certified copies). Oral pleadings, with the litigants, their lawyers, and their witnesses are heard on the main hearing date. During these proceedings the judge is required to attempt conciliation between the parties.

Standard court procedures can be also fast and effective when the creditor can provide documents that clearly show the amount of debt and the confirmation of delivery of goods (or proper performance of services), especially if the documents have been signed by the debtor. The court issues an order for payment which states that the debtor should pay the amount of the debt in two weeks, or return a written argument within the same period of time. However, in standard procedures, it is quite easy for the defendant to postpone the case. When the defendant argues the order of payment during this kind of procedure, it can take a long time to obtain the final verdict, due to the lack of judges and large backlog of cases.

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Enforcement of a Legal Decision

When all appeal venues have been exhausted, a judgment becomes final and enforceable. If the debtor does not comply with the judgment, the creditor can request that the court orders a compulsory enforcement mechanism of the decision, through a bailiff. For foreign awards rendered in an EU country, specific enforcement mechanisms such as the EU Payment order or the European Enforcement Order can be used for undisputed claims. Awards rendered in non-EU countries are recognised and enforced, provided that the issuing country is party to a bilateral or multilateral agreement with Poland.

Insolvency Proceedings

RESTRUCTURING PROCEEDINGS

The 2015 reform on polish insolvency law introduced four new types of restructuring proceedings which aim to avoid the bankruptcy of insolvent or distressed businesses.

The “arrangement approval proceedings” is available to debtors who are able to reach an arrangement with the majority of creditors without court involvement and where the sum of the disputed debt does not exceed 15% of total claims. The debtor will continue to manage its estate but it will be required to appoint a supervisor, who will prepare a restructuring plan. The creditors approve the proposal through a vote.

Accelerated arrangement proceedings are also available if the sum of the disputed debt does not exceed 15% of total claims. The procedure is simplified in relation to the allowance of claims carrying voting rights. Creditors can only make reservations via a list of claims prepared by the court supervisor or administrator. The debtor’s estate will continue to be managed by the debtor-in-possession, but a court supervisor will be appointed to supervise its management.

The “standards arrangement” proceeding is available for disputed debts exceeding 15% of the total claim. With these proceedings, the court secures the debtor’s estate by appointing a temporary court supervisor.

“Remedial” proceedings offer the broadest restructuring options and scope of protection of the debtor’s assets against creditors. The appointment of an administrator to manage the debtor’s estate is mandatory.

BANKRUPTCY PROCEEDINGS

Bankruptcy proceedings can only be declared when a debtor has become “insolvent”. There are two test of insolvency – the liquidity test and the balance sheet test. Both aim to liquidate the estate of the bankrupt company and distribute the proceeds among its debtors. The entire procedure is court-driven, although the 2015 reform has given creditors holding major claims a right to influence the Polish anti-crisis legislation (so called “Anti-Crisis Shield”) to a small extent affects issues related to cash receivables in business-to-business relations, although the exception here are receivables resulting from lease contracts in commercial facilities over 2000 square meters. In this respect, the obligation to pay the rent was temporarily suspended for the full-lockdown period.

COVID – 19:

The most important solutions introduced by this legislation concern bankruptcy proceedings thus the responsibility of management board members for failure to file a bankruptcy petition was suspended. This resulted in a decrease in the number of bankruptcy petitions (instead of the expected increase) in the initial phase of the pandemic. Anti-Crisis Shield also announced a new type of restructuring procedure, namely the simplified restructuring procedure. This procedure is similar to the procedure for approval of an arrangement, which has not been popular so far. The opening of this procedure is associated with undoubted privileges for the debtor, such as the suspension of creditors' obligations for a maximum period of four months while the court approves the arrangements made with creditors. During this period, it is impossible for the creditors to terminate contracts or to start enforcement procedures titles (like court judgements or payment orders). It is all linked with a minor restriction in managing the debtor’s company. So far, we observe a certain number of these proceedings being opened.

Last updated: January 2025