Massive energy price hikes could trigger recession in Poland

Rising prices and concerns about the availability of coal and gas and the shrinking reserve capacity of conventional power plants are pushing electricity prices on the wholesale market. In recent weeks the record has been chasing the record. As a result, as ERO President Rafal Gawin has already announced, Poles can expect several dozen percent increases in their electricity bills in 2023. In the case of businesses, these increases could amount to several hundred percent. Meanwhile, Polish companies are already considering the risk of reducing production, which is becoming unprofitable due to the drastic rise in costs.

"We can expect a situation that, on the one hand, as a result of these large increases, the economic activity of the Polish economy will decrease, and we will have a recession. And on the other hand, we will not be able to get out of this recession because we will run into a wall in the form of insufficient generating capacity of the Polish energy industry. Even with lower energy commodity prices, we won't be able to offer enough energy at competitive enough prices. Not to mention the carbon footprint, which will also be a certain burden on Polish products," Grzegorz Onichimowski, an expert at the Civic Institute and former president of the Polish Power Exchange, said.

Meanwhile, electricity prices on the Polish Power Exchange are breaking historical records. 

(Newseria)