EU funds bolster Poland's economy, as export market weighs, central bank says

WARSAW (Reuters) -Poland's economic output has been bolstered by investment from European Union funds that is expected to continue next year, the central bank said on Friday, but added that economic activity was expected to slow into 2026.

"Forecasts indicate that GDP growth in the second half of 2025 will remain at a level similar to the first half," the National Bank of Poland said.

After that, it said, activity could slow and that a major uncertainty was "the further course of Russian armed aggression against Ukraine".

Weak foreign demand due to stagnation in Germany had limited Polish economic growth, and the contribution of net exports to GDP was negative in the first half of 2025.

The bank said downside risks depended on the extent to which European Union funds continued to be used and the demand outlook.

It also said that forecasts showed annual average consumer price inflation, as well as core inflation, would fall next year.

Saying fiscal policy was the main tool to mitigate the impact of any shocks on the economy, the central bank said the shape of 2026 fiscal policy was a significant uncertainty.

(Reporting by Pawel Florkiewicz, Anna Wlodarczak-Semczuk and Karol Badohal; editing by Barbara Lewis)