Strong June data boosts Poland’s growth outlook despite rising external risks
The desk points to an optimistic growth outlook for Poland, bolstered by robust industrial and construction data from June, which shows a year-on-year industrial output increase of 7.6%. This growth is occurring despite external challenges, such as rising oil prices and geopolitical tensions, particularly in the Persian Gulf. As articulated in the recent commentary from ing-think, seen data suggests that Poland's economy is outperforming many regional peers, with certain sectors displaying significant growth, despite a K-shaped recovery pattern. The broader economic picture presents a balanced labor market with signs of disinflation. This offers a positive backdrop for the Polish złoty (PLN), particularly in light of how the market is positioning itself around these growth prospects.
What the desk is arguing
The desk believes that Poland's strong June economic data indicates a resilient recovery trajectory, which could support appreciation in the PLN against its major pairs. Per the full note, a noted increase in industrial output is a significant element driving this narrative.
The solid year-on-year increase of 7.6% in industrial output, in contrast to previous months, showcases Poland's capacity to navigate external pressures, including volatile energy prices. Additionally, the labor market's stability, coupled with declining Producer Price Index inflation from 2.4% to 1.7%, further affirms the potential for sustained economic growth.
Where it sits in our coverage
Our consensus target for PLN against EUR is 1.075, within a range of 1.04 to 1.12 as tracked by key firms. The following are notable targets from respected institutions: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view aligns with jpmorgan, which also sees upside potential for the PLN, while diverging from bofa, which maintains a more cautious stance at the lower bound of the range.
How other firms see it
Institutions aligned with this optimistic outlook include jpmorgan, acknowledging the improving growth metrics and supportive domestic conditions for the PLN. Conversely, bofa holds a more bearish position, highlighting the risks posed by external pressures that could curtail growth.
Traders should monitor the EUR/USD trajectory as it reflects broader economic sentiments that could influence PLN performance against the euro, considering the correlations between energy prices, inflation metrics, and monetary policy expectations across the Eurozone and Poland.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Poland's industrial output rose 7.6% YoY in June, indicating solid growth.
- 02Disinflationary pressures are emerging, supported by stable wage and employment metrics.
- 03Geopolitical tensions in the Persian Gulf have been less detrimental to Poland's economic recovery than anticipated.
- 04A K-shaped recovery highlights a disparity in performance across various manufacturing sectors.
Market implications
Watch the PLN for potential moves towards the 1.075 target, particularly in response to evolving global oil prices and any shifts in geopolitical tensions that could impact the Polish economy. Positioning signals may suggest increased PLN bullish sentiment as traders align with positive growth data.
Risks to this view
Negative outcomes, such as escalated geopolitical conflicts affecting energy prices or a sudden economic downturn, could invalidate the positive outlook for the PLN. Additionally, if the K-shaped recovery intensifies, limiting growth in underperforming sectors, it may dampen confidence in the broader economic recovery.
Articles Strong June data boosts Poland’s growth outlook despite rising external risks Published 11:23 Poland Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download June's industry and construction data saw solid gains, with second-quarter momentum building despite both turmoil in the Middle East and higher oil prices. At the same time, wage and employment data reflects a balanced labour market contributing to disinflation. Still, renewed tensions in the Persian Gulf are adding a fresh layer of uncertainty Rafal Benecki , Adam Antoniak , Michal Rubaszek and Mateusz Sutowicz The economic impact of the US-Iran war has proven less severe than previously feared so far for Poland.
We see upside risks to this year's GDP growth forecasts Industry outperforming regional peers, but growth remains uneven Poland’s industrial output increased by 7.6% year-on-year in June, up from 4.1% YoY in May. Domestic industry appears to be weathering global headwinds stemming from higher oil prices and mounting competitive pressure from Asia better than many of its European peers. At the same time, we see signs of a K-shaped rebound and an uneven recovery, with some manufacturing divisions performing well while others, including old export leaders, continue to struggle.
Strong growth was recorded in sectors reflecting expanding public investment and defence spending (e.g., machine repairs), export sectors like the manufacturing of other transport equipment (+24.9% YoY), paper and paper products (+19.0% YoY), and waste collection, treatment and disposal (+16.5% YoY). By contrast, output declined in the manufacture of tobacco products (-10.2% YoY), textiles (-7.0% YoY), and furniture (-2.5% YoY), while competitive pressure from Asian producers continues to intensify. The June ceasefire between the US and Iran, and the resulting decline in oil and natural gas prices, eased pressure on producer prices last month.
PPI inflation slowed to 1.7% YoY from 2.4% in May. Producer prices are no longer in deflation, but the return to positive inflation largely reflects the initial energy shock linked to the Gulf conflict, while some sectors continue to reflect disinflationary trends. The conditions deteriorated again in July, however, which may weigh on manufacturing performance in the coming months and push PPI inflation higher once more.
Construction up, driven by advanced public investment cycle and growing civil engineering The construction output increased by 5.2% YoY in June, following a 3.9% YoY rise in May, as the sector continues to recover from adverse weather conditions at the beginning of the year that led to double-digit declines in production. The inflow of EU funds from the Recovery and Resilience Facility (RRF) and cohesion policy programmes is supporting public investment. In June, we observed strong growth in infrastructure investment, with civil engineering output rising by 18.7% YoY.
At the same time, specialised construction activities and building construction recorded declines. The latter most likely reflects weakness in residential construction, where an overhang of unsold dwellings remains close to 6 months of sales vs multi-year average at 3. Nevertheless, 2Q26 brought a marked improvement in the construction sector, with output increasing by around 4.5% YoY following a sharp decline of 8.0% YoY in 1Q26.
This suggests that investment activity gained momentum after a weak start to the year, although it likely remains more buoyant in the public sector than in the private sector. Labour market showing signs of softening despite overall tightness Wage growth remained below 6% YoY for the third consecutive month, reaching 5.9% YoY in June, while employment in the enterprise sector continued to decline (-0.9% YoY). Softer wage growth was particularly evident in services, including accommodation and food services, transport and logistics, and IT.
Wage pressures are easing, and business surveys indicate a decline in the share of companies planning wage increases, as well as smaller planned pay rises. Employees' bargaining power has weakened as labour demand has softened in some sectors. Diminishing wage pressures would be welcomed by monetary policymakers, as the labour market is no longer a significant source of inflationary pressure.
Wage growth is currently broadly consistent with core inflation stabilising around the central bank's target. The labour market is no longer pro-inflationary and may even contribute to easing inflation pressures going forward. Bottom line Despite the outbreak of conflict in the Middle East, this year's second quarter has turned out to be an improvement from the first for Polish industry and construction.
Activity in retail trade and services was presumably softer than at the beginning of the year, but the overall picture emerging from the available data is positive nevertheless. GDP growth, both in annual terms and on a seasonally adjusted quarter-on-quarter basis, was probably stronger in 2Q26 than in the previous quarter, posing upside risks to our 2026 growth forecast of 3.4%. Given the scale of the geopolitical risks involved, we maintain our cautious forecast.
However, it appears that the negative impact of the conflict between the US and Iran (alongside the blockade of the Strait of Hormuz) on economic activity and inflation in Poland has been less severe than previously feared. Wages growth Industry GDP Construction output Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.
Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Rafal Benecki Chief Economist, Poland Rafal Benecki is a Chief Economist at ING in Poland, joining in 2005. Prior to this, he was the head of the Economic Analysis Bureau at Millennium Bank in Warsaw. He has an MSc in Financial… Adam Antoniak Senior Economist, Poland Adam has about 20 years of experience in macroeconomic research.
He has worked for leading financial institutions in Poland (Bank Pekao, Bank BPH), and members of international financial groups… Michal Rubaszek Senior Economist, Poland Michal Rubaszek is a Senior Economist at ING Poland, joining in 2022. He is also a professor of economics at SGH Warsaw School of Economics and the author of numerous academic articles on… Mateusz Sutowicz Senior Economist, Poland Mateusz is a Senior Economist based in Warsaw and joined ING in 2025. He graduated from the Catholic University of Lublin and previously worked as a financial market analyst at Bank Millennium for… In this article Industry outperforming regional peers, but growth remains uneven Construction up, driven by advanced public investment cycle and growing civil engineering Labour market showing signs of softening despite overall tightness Bottom line
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