Nawrocki's Election Shakes Market Confidence as Poland Faces Fiscal and Labor Challenges

Trzaskowski was widely viewed as more market-aligined and was likely to cooperate very closely with the government on reforms. By contrast, Nawrocki might veto fiscal laws that do not satisfy PiS demands, thereby further obstructing an effort to rein in Poland's large budget deficit.

Fiscal Outlook Hazy amid Economic Uncertainty
Standard & Poor's said a Trzaskowski win might allow Poland to begin to shore up its finances. With a 6.1% of GDP deficit expected in 2025—over 200 billion złoty—the government feels the need to move swiftly before the next election cycle. Further cuts down to 3.9% by 2028 depend on progress on reforms, but Nawrocki's presidency may instead slow that down.

Poland's GDP was an estimated 3.3 trillion złoty (€772 billion) in 2024. A president and government that are not in sync could have implications for credit ratings and borrowing costs, especially if plans for fiscal tightening hit the buffers.

Job Slump Despite Low Unemployment Rate
New data indicate that Poland's labor market is softening. The number of people in work fell by 134,000 on the year to 17.06 million, the lowest for four years. Labor force participation slipped, and the self-reported unemployment rate ticked back up to 3.4 percent — its highest level since 2021. The official unemployment rate is higher, at 5.2%, but epidemiologists consider the survey-based figure to be more accurate for tracking the pandemic.

Even as more workers are out of work, many companies complain that they can't find enough employees. About 30% say they get no applications for certain positions, while 41% blame excessive salary demands. In reaction, companies are raising their use of overtime and employing more pensioners — 17 percent are now using retirees, compared to 11 percent last year.