The Polish economy will contract by 4.25 percent in 2020 before growing again by around 4 percent in the following year, the European Commission (EC) said on Wednesday.

"The COVID-19 pandemic is set to end nearly three decades of uninterrupted growth in Poland. GDP is projected to decline in 2020 by about 4.25 percent due to a disruption in economic activity caused by the lockdown measures and an unprecedented fall in external demand," the EC said in its Spring 2020 Economic Forecast.

The report said that Poland's GDP should bounce back by around 4 percent in 2021.

"The recovery will largely depend on the effectiveness of government measures and how they cushion the impact of the shock on the labor market. Also, beyond global downside risks, the virus could have a long-lasting impact on some sectors, particularly services, which could limit the scope for recovery," it added.

According to the forecast, Poland's labor market is "set to be impacted by the lockdown measures and the drop in demand, bringing the unemployment rate to around 7.5 percent in 2020."

The Polish Minister of family, labor and social policy Marlena Malag said Wednesday that jobless rate increased slightly to 5.7 percent at the end of April.

However, the reading "does not reflect the real situation" and the underlying unemployment is likely higher, the minister told public radio PR1.

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