Wealth of Nations Index 2025: Poland’s decade of catch-up and new economic challenges

The 2025 edition of the Wealth of Nations Index (WNI), produced by the Warsaw Enterprise Institute, marks a milestone: it allows a ten-year view back to the 2015 baseline. Though data timings mean the actual comparison spans 2014–2024, this year’s report offers valuable insight into how Poland — and the wider European and global landscape — has evolved economically over the past decade.

The WNI, which measures the accumulation of economic benefits per citizen, goes beyond GDP per capita by incorporating the quality of public spending, not just its monetary value. It weights the outcomes of government expenditure — in areas such as healthcare, education, infrastructure, internal security, and freedom of speech — alongside private sector spending, providing a richer, more nuanced assessment of national wealth.

Three Economic Eras in a Decade

The past ten years can be divided into three clear periods. From 2015 to early 2020, Poland and much of Europe enjoyed dynamic economic expansion, with Poland particularly standing out for its fast growth. Then came the global pandemic, which between 2020 and late 2022 threw economies worldwide into recessions of varying depths. Finally, the past two years have been marked by a period without one dominant global crisis, but instead by multiple simultaneous pressures: the war in Ukraine, persistent high energy prices, rising inflation, global supply chain disruptions, and renewed U.S. trade protectionism.

One striking conclusion of the 2025 WNI is how much more resilient the United States has proven to be compared to Europe. While the U.S. continues to inch forward, scoring 110.0 points this year (up 0.3 points from 2024), many leading European economies remain stagnant or have regressed. Germany (92.0 points), Austria (94.2), Denmark (103.4), and the UK (81.2) have all failed to improve year-on-year. Notably, the average WNI for EU countries has hovered around 75 points since 2021, with only Central European countries like Poland, Romania, the Czech Republic, and Croatia pushing that average slightly higher.

Poland’s Remarkable Convergence

Poland’s economic journey over the past decade has been one of impressive catch-up. In 2015, Poland ranked among the least prosperous EU nations, lagging behind even its Central European peers. Its WNI score was more than 25% lower than the EU average and nearly 50% lower than that of Austria, the region’s top performer at the time. But year after year, Poland steadily closed these gaps.

In last year’s edition, Poland’s WNI stood at 68.7, almost identical to the Central European average (68.9), effectively erasing a 13% regional shortfall over the decade. Poland now outranks Slovakia, Hungary, and Latvia, countries it once trailed, and the EU gap has shrunk to just 12%, down from 25% a decade ago. While catching up to the EU average entirely remains a future goal, overtaking countries like Portugal and Estonia seems achievable within the next two to three years.

A Warning Sign: Slowing Momentum

However, the 2025 report introduces a note of caution. This is the first edition where Poland’s WNI score declined compared to the previous year — and notably, its decline was sharper than the EU and regional averages. While a single year’s data might reflect temporary factors, the report urges attention to the underlying trends, especially the deterioration in the quality of public spending.

Poland’s public spending quality index rose steadily from 45.7 in 2015 to a peak of 61.2 in 2022, reflecting stronger state services and investments. But over the past three years, it has slipped consecutively, now standing at 56.5. The report notes that Poland’s government is currently delivering below-average quality for the level of spending it undertakes. For comparison, countries like Spain and Croatia, which spend similar amounts per citizen, score far higher on public spending efficiency (66.6 and 65.8, respectively).

Crucially, until now, Poland’s overall WNI growth was powered by private sector dynamism, which offset public sector weaknesses. But in the most recent data, both private and public components showed declines — a concerning signal that the country’s previous economic model may need recalibration.

The Global Context: U.S. Versus Europe

The WNI highlights how Europe, broadly, has struggled to regain momentum post-pandemic, while the United States has continued to widen its economic lead. In the mid-1990s, Germany’s national income per citizen was on par with that of the U.S.; today, European countries increasingly appear like “poor cousins,” not just in GDP per capita but also in the development of advanced economic sectors.

Journalists and economists such as Matthew Karnitschnig and Daniel Mitchell (author of the provocatively titled “European Policies = European Stagnation”) point to structural rigidities, over-regulation, and protectionist tendencies as key barriers holding Europe back. The WNI’s findings support this narrative, showing that Western Europe’s average score has remained flat for several years, while North America continues to inch upward.

The Mechanics of the Index

The Wealth of Nations Index measures two main components:
• Private spending per capita, adjusted for purchasing power differences, reflecting the real value of citizens’ consumption and investment decisions.
• Public spending outcomes, evaluated through a composite quality index covering national defense, security, infrastructure, healthcare, education, environmental stewardship, and civil liberties.

The final WNI score combines these elements, further factoring in a “public spending bonus” that recognizes the potential of well-managed government spending to outperform market-driven outcomes in certain sectors.

Looking Ahead

The WNI report argues that the coming years will likely test economies worldwide as geopolitical tensions and global protectionism dampen private sector momentum. In this environment, the quality and efficiency of public spending could play an increasingly critical role in sustaining national wealth.

For Poland, which has shown extraordinary progress over the past decade, the risk is that declining public sector performance may now drag on overall economic potential. As the report concludes, the “catch-up decade” may be ending, and the challenge ahead will be to shift from simply closing gaps with the EU average to sustaining quality-driven growth in a tougher, more uncertain global landscape.

Source: Warsaw Enterprise Institute (WEI)