Poland warns of crisis due to 'demographic meteorite'

Poland's population is rapidly aging, and if this problem is not addressed, the situation will become a national economic problem, said Slawomir Dudek, president of the Institute of Public Finance, commenting on the findings of the Organization for Economic Co-operation and Development (OECD) in the Polish Economy Review 2023. Rzeczpospolita writes about this.

“We are already in a demographic crisis: over the decade, the number of Poles has decreased by almost 2 million. You can slightly change the trajectory of this crisis meteorite, but it will definitely hit us,” the economist believes.

Dudek called for softening the migration policy, stimulating the economic activity of the population, which is low compared to other EU countries, and raising the retirement age and the birth rate. He acknowledged: "Although in the latter case, the reality is inexorable: it shows that even very expensive programs do not bring tangible results."

OECD analysts have previously pointed to the huge pressure on the Polish economy, one of the scenarios they compiled provided for an uncontrolled increase in public debt to 138% of GDP by 2050, now the national debt of the republic reaches 55%. Dudek explained that at current prices this would mean an increase in public debt from 1.5 trillion zlotys to 4 trillion zlotys (from 25.6 trillion rubles to 68.3 trillion rubles -).

According to RP, for every 100 working Poles aged 24-64, in 2020 there were 38.2 people over 65 years old - the time of retirement. In 2025, this figure will grow to 45.6%, in 2030 it will be almost 50%, in 2050 - 74.7%, and by 2070 it will reach 90%.

Experts noted that although the Polish authorities are responding to the needs of an aging population - spending on pensions, HEALTH care, social care, education for the elderly and measures to reduce poverty among them are growing, but do not reduce spending on public security, defense and other budget items.

Poland can avoid a sharp increase in public debt by increasing taxes and contributions, OECD experts say. The volume of debt in relation to GDP may even decrease if Warsaw decides to raise the retirement age to 67 years for men and women, increase the level of digitalization of the economy in order to accelerate economic growth.

Analysts' fears could come true if action is not taken, Lukasz Kozlowski, chief economist at the Federation of Polish Enterprises, warned RP. “The most important thing is to start discussing it now. This problem goes beyond political differences, because the demographic crisis on the horizon of two or three decades is a fundamental challenge for both public finances and the economy,” he said.

The European Commission predicts that by about 2055 the number of working Poles will equal the number of Polish citizens over 65 years old, and then, probably, will begin to decline. In the country until recently, there was one pensioner for every three people who brought income to the budget.