The Determinants of Economic Growth in Poland in 2018-2023

Purpose: The aim of this article is to answer the question, how did the main economic determinants influence economic growth in Poland in the period of 2018-2023, and to formulate some recommendations for economic policy supporting long term economic growth in the future. Design/Methodology/Approach: During the research period and, more broadly, in 2016-2023, the monetary and fiscal policies were both subordinated to political goals and were not based on economic principles or consistent over time. Voluntarism was omnipotent. Government activity in the field of economic policy largely resembled the principles of the so-called modern monetary theory, but no one will confirm that policy – the makers at that time had no idea about this theory. The study has used the Keynesian equation concerning the open economy, known from the literature. It proposes 3 models to evaluate the performance of the Polish economy in the study period using quarterly data from the base “Metadata by countries” (IFS) – IMF Data. Findings: The estimation results indicate a good model fit. All the variables are statistically significant. The variability of GDP growth (ld_GDP) is most strongly affected by the variability of households’ consumption growth (ld_C), followed by the variability of investment growth (ld_GFCF) and government consumption growth (ld_GC). The growth of exports (ld_EX) variability has a lower impact on GDP growth variability than the variables mentioned above. Practical Implications: The period of 2018-2023 was specific in the functioning of the Polish economy. It was characterized by a lack of coordination of fiscal and monetary policies and voluntarism in making macroeconomic decisions based on political calculations. In addition, the pandemic crisis affected the global as well as the Polish economies, leaving a significant impact on economic growth processes. Originality/Value: This was exacerbated by the energy and raw materials crisis caused by the war in Ukraine. The above factors significantly undermined Poland’s economic growth and, together with an expansionary macroeconomic policy, led to a relatively high, double-digit inflation compared to other EU countries.