Productivity in Poland will continue to grow until 2027, thanks in part to the development of Generative Artificial Intelligence (GenAI), EY wrote in its report. From 2019 to 2024, productivity growth in Poland was 9.6 percent, higher than in the United States (7.3 percent) and other Western countries.
“We forecast that productivity growth in Poland over the next 3.5 years will be similar or slightly faster than in the last 4.5 years, which means a slight acceleration in annual terms. This will certainly be influenced by unfavourable demographics, which will hinder development by increasing employment and will force an increase in work efficiency. An additional factor increasing productivity will also be AI, but in this case our estimates for the coming years are more cautious compared to some market projections. If it were possible to increase the level of investment, the productivity growth could be even greater,” said Marek Rozkrut, EY partner, head of the economic analysis team, EY chief economist for Europe and Central Asia, quoted in the release.
Experts point out that Poland and the CEE region are strongly export-oriented and have a chance for an additional boost from increased external demand from Western Europe as a result of the relatively rapid adoption of AI in this region.
“Thanks to this effect, AI is expected to boost Central and Eastern Europe's GDP by 1.0%, outpacing the combined direct TFP and investment growth of 0.6% (according to the conservative estimates mentioned above),” the report reads.
EY analyzed productivity (calculated as GDP per hour worked) between 2015 and 2024. As reported, EY analysts looked in more detail at the period between the fourth quarter of 2019 and the second quarter of 2024.
According to analysts, Poland is doing much better than Western European countries . In Germany, productivity increased by 0.7% in 2015-2024, in Great Britain by 2%, and in France it fell by 1.5%. The fastest growth in GDP per hour worked was in Malta (as much as 18.7%) and in Slovakia (an increase of 12.3%).
Experts point out that the increase in productivity in Poland can be attributed to the convergence process.
“The capital stock after the political transformation was low in our country compared to countries such as Germany or France. However, the efficiency with which we work began to grow dynamically, among others thanks to the possibility of using Western technologies. Additionally, the entire Central and Eastern Europe experienced the most pronounced growth in TFP (Total Factor Productivity) in the area of Europe, Africa and Central Asia (EMEA), maintaining good results even in the face of the slowdown after the global financial crisis,” the report reads.
As reported, the most dynamic growth of GDP per hour worked in Poland in 2019-2024 can be seen in the agriculture, forestry and fisheries sector (37.1% in 2019-24 compared to 9.1% in 2015-19). According to experts, this may be due to the decline in the number of small semi-subsistence farms and the decline in the real estate market, which, although it has lost momentum, is still developing dynamically (productivity increased by 39.8% in 2015-19 and by 35% in 2019-24).
“In terms of sectors, productivity growth is broad and covers almost all analysed industries. Although the pace of this growth is varied, we do not observe a situation in which one sector is responsible for the majority of the total productivity growth,” said Maciej Stefański, senior economist from EY's economic analysis team, quoted in the report.
It was added that a clear slowdown in recent years has occurred in the ICT sectors, i.e. Information and Communication Technology (from 17.3% in 2015-19 to 1.7% in 2019-24), finance (from 46.3% to 4.4%), professional services (from 18.5% to 1.3%), public services (from 8.8% to 6.1%) and trade, transport, accommodation and catering services (from 15.9% to 10.5%). The entertainment industry is still struggling with the effects of the pandemic, being the only one to record a 16% drop in productivity in the period 2019-24. (PAP Biznes)
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