Poland's GDP is set to grow by 0.5% in 2023 and 3% by 2024, according to the latest forecasts by Bank PKO BP published on Monday.

Analysts at the bank said the economic downturn had already bottomed out.

"We maintain that the bottom of the economic downturn occurred in the second quarter, and in the one just passed, the third, the annual dynamic was already positive," said the bank's chief economist, Piotr Bujak, during a press conference.

Bank PKO BP forecasts growth in Q3 at 0.4% and Q4 at 2.2%, with the growth figure for the year as a whole standing at 0.5%, The First News reports.

"In the whole of 2024, we expect GDP growth at the level of 3%," Bujak stated.

The bank's chief economist attributed the growth acceleration to consumption to a strong job market, despite indications of waning demand for labour, with fewer vacancies and a deteriorating employment dynamic.

"The good situation on the labour market creates good grounds for a rebound in consumption. Salaries are rising at a two-figure rate. Inflation is still in single figures and will fall. This helps retail sales," Bujak said.

"We predict that by the end of the year, the consumption dynamic will start to improve. We believe that the real consumption dynamic will improve by 5 percentage points - from minus 1 percentage point in 2023 to plus 4 in 2024," he went on to say.

The bank added that despite the increase in consumption, inflation would continue to decline.

"In spring 2024, we will see inflation at the level of about 4%, according to PKO economist Marta Petka-Zagajewska. "But in December 2024, inflation will still stand at about 4%."

Lower inflation would be joined by falling interest rates, said the bank's analysts.

"We think that at the end of this year, interest rates will fall to 5.5% and to 4.5% at the end of next year, specifically at the end of the first half of 2024," Bujak added.