Warsaw among the leaders of the Oxford Economics ranking

According to the experts from Oxford Economics, in the next four years, the capital of Poland will be the city that will grow the fastest, next to Prague. We can expect an average GDP growth of around 3% per year between 2024 and 2028.

GDP growth for European cities

Overall GDP growth for the top 30 European cities will be 1.1% in 2024. Nevertheless, there are grounds for cautious optimism. These include: the decline in the inflation rate in Europe and a relatively resilient labor market. GDP growth is projected to pick up pace from 2025, stabilizing at an average of 2.1% per year in 2025-2028.

Investment attractiveness and funds from the NRP

Central and Eastern European cities will achieve the fastest rates of economic growth. Warsaw and Prague will be at the top of the ranking. For these capitals, the average annual GDP growth will hover around 3% per year between 2024 and 2028. In recent years, these cities have benefited significantly from the influx of foreign direct investment. Metropolises are distinguished by their investment attractiveness, especially in the ICT and professional services sectors. A key driver of economic growth in cities will  primarily be the increasing level of productivity, supported by internal investments.

In the case of Warsaw, an important stimulus influencing GDP growth will be the unfreezing of access to EU funds. Our country is to receive EUR 59.8 billion (approx. PLN 256 billion) from the NRP. It will be EUR 25.27 billion (PLN 108 billion) in grants and EUR 34.54 billion (PLN 148 billion) in the form of preferential loans. On April 15, Poland received almost PLN 27 billion from the European Commission from the first payment application under the National Recovery Plan (NRP).

Positive prospects for Nordic cities

Stockholm and Copenhagen are among the strongest economies in the Nordic region. Both cities will maintain their position. Stockholm has a diverse economy with strong ICT and business services sectors, a well-educated workforce, and the quality of life in this city is high. Copenhagen is the retail, ICT and business services sectors. Oslo also has promising prospects with similar sectoral factors. Helsinki, on the other hand, is slightly weaker, with some challenges in terms of public services and  the manufacturing sectors.

Financial centres face a challenge

In recent years, we have been observing dynamic changes in the financial world that affect financial centres. London, Frankfurt and Zurich are facing quite a challenge. The finance and insurance sector in these cities accounts for a significant share of GDP, but it is struggling. Employment growth is subdued, with innovation and cost pressures impacting the sector’s prospects. Nevertheless, there is no reason to expect a reversal in the direction of this sector in the foreseeable future.

A less optimistic situation in southern Europe

Rome, Athens and Lisbon were at the bottom of the ranking of the growth and strength of cities, with little prospect of change. Experts predict that this trend will continue. High unemployment rates and limited opportunities have forced many residents to leave these cities in search of work elsewhere. This, in turn, resulted in a weak demographic outlook and a slowdown in GDP growth compared to other cities in Europe.

About the authors of the report

Oxford Economics is an international consulting company specializing in global economic forecasts. It was established in 1981 in cooperation with Oxford University’s business school.

Source: Medium-term cities outlook improves after a tough few years, Oxford Economics