The World Bank and IMF warn that unresolved conflict in the Middle East poses a significant risk to Poland’s economic growth, prompting lowered forecasts.
World Bank and IMF Concerns
The World Bank (WB) reports that the ongoing conflict in the Middle East represents a serious threat to the global economy and developing countries in Central and Eastern Europe (ECA). The International Monetary Fund (IMF) also indicates that the unresolved conflict surrounding Iran has already negatively impacted global economic activity.
Revised Growth Forecasts for Poland
The World Bank has lowered its economic growth forecast for Poland by 0.1 percentage points for the current year and 0.3 percentage points for next year, compared to January estimates. Economists at the WB now predict Poland’s annual GDP will reach 3.1% in 2026 and 2.6% in 2027.
IMF to Adjust Projections
The IMF is also considering the growing risks to global economic activity linked to the war in Iran and intends to reflect these concerns in its forecasts next week.
Central European Economies Slowdown
The World Bank anticipates that economies in Central Europe (Bulgaria, Croatia, Poland, and Romania) will grow by approximately 2.4% this year, slowing to 2.3% in 2027. This represents a downward revision of 0.3 and 0.4 percentage points, respectively, from January estimates. The region’s economy grew by 2.9% year-on-year in 2025.
Impact on Consumption and Investment
The World Bank believes higher energy costs will weaken private consumption in Central Europe, while uncertainty will negatively affect investment. However, weaker consumption will be partially offset by public investment funded by European Union resources.
Potential Disruptions and Regional Impacts
According to the World Bank, military actions and disruptions to shipping through the Strait of Hormuz could significantly impact economic growth and private consumption across most of the ECA region. Increased uncertainty is likely to restrain investment, and weaker global demand will lead to a decline in exports. Energy exporters may benefit temporarily from higher commodity prices, provided they have available production and export capacity. Energy importers – the majority of countries in the region – will face increased pressure on their budgets and current accounts.
Expert Assessments and Regional Resilience
Antonella Bassani, World Bank Vice President for Europe and Central Asia, stated that the resilience of regional economies is being tested and that many countries will need to take action to mitigate the effects of the crisis, with particular attention to protecting vulnerable groups.
Bassani added that continuing reforms to support business growth and job creation will help mitigate the crisis’s effects and strengthen the resilience and growth dynamics of economies in the long term.
Scenario Analysis and Growth Slowdown
In a baseline scenario assuming a significant but temporary increase in energy prices in 2026, economic growth in Europe and Central Asia is likely to slow considerably. The region’s real GDP growth is forecast to fall to 2.1% in 2026, as growth in Russia slows to 0.8%. Excluding Russia, annual economic growth in the region is expected to slow to 2.9% this year, the lowest level since 2020.
Key Risks and Potential Escalation
The main risk to the World Bank’s forecasts is a potential prolonged and more intense conflict in the Middle East, which could disrupt global energy and fertilizer supplies, significantly raising energy and food prices and substantially limiting economic growth in the region.
IMF to Lower Forecasts Even with Quick Resolution
The IMF assesses that the war in Iran will lead to increased inflation and a slowdown in global economic growth. Kristalina Georgieva, Managing Director of the IMF, stated that even if the conflict is quickly resolved, the IMF intends to lower its economic growth forecast and raise its inflation forecast.
Georgieva noted that the war has caused the most significant disruption in global energy supplies in history, with the production of millions of barrels of oil halted due to Iran’s effective blockade of the Strait of Hormuz, a key route for one-fifth of the world’s oil and gas.
National Forecasts and NBP Survey
The National Bank of Poland’s (NBP) Macroeconomic Survey (AM NBP) central forecast for real GDP growth this year, based on aggregated expert forecasts, is 3.6%, with typical scenarios ranging from 3.2% to 3.9%. The survey included 21 external experts representing financial institutions, research centers, and business and employee organizations. Experts predict a gradual slowdown in economic activity to 3.2% and 2.9% in 2027 and 2028, respectively, with typical scenarios ranging from 2.5% to 3.8% and 2.1% to 3.6%, respectively.
Recent Developments and Oil Price Impact
The US and Iran announced a two-week ceasefire today. In response, oil prices fell by approximately $10 to around $95 per barrel.
S&P Global Ratings recently estimated the impact of oil prices on the economic activity of Central and Eastern European countries before the ceasefire. Assuming an average Brent oil price of $80 per barrel in 2026 and a decline to $65 per barrel in 2027, economic growth in Poland would be 3.3% year-on-year this year, slowing to 2.9% next year, with a negative impact on the credit rating being manageable for countries in the region. In a severely negative scenario, with a Brent oil price of $130 per barrel in 2026 and $100 per barrel in 2027, economies that are more energy-intensive and dependent on energy imports, including Turkey and Hungary, would be most affected, with the effects depending on available reserves and policy responses. The agency’s forecast for average annual economic growth in Poland in this scenario for 2026-2027 is 2.5% and 2.6%, respectively.
BGK Assessment and Domestic Momentum
Bank Gospodarstwa Krajowego (BGK) assesses that the current momentum of the domestic economy will “likely neutralize most of the negative effects” of the war in the Middle East.
“Assuming that it will end in the coming months (which is the basis of our baseline scenario), the slowdown in growth will remain relatively small. The pace of consumption growth will remain at least solid, especially as fuel tax cuts will limit the impact of the war on household sentiment. The calendar for absorbing EU funds will have a positive impact on the dynamics of investment. In this scenario, we forecast that GDP growth will be around 3.5% this year,” BGK assessed.
