Polish economy returns to growth amidst pandemic-related setbacks

The Polish economy is expected to grow by 3.3 percent in 2021, as a recovery in trade in the euro area, combined with improved confidence and a rebound in private consumption and investment partly offset the negative impacts of the resurgence of the pandemic late in 2020 and a recent flareup in new cases, says the latest edition of the World Bank’s Economic Update for Europe and Central Asia, released today.

The projected rebound in 2021 is weaker than previously anticipated (3.5 percent), reflecting the uncertainty surrounding the emergence of new strains of Covid-19 and the uneven pace of vaccination in Europe.

 The World Bank expects that following the moderate recovery this year, growth will accelerate to 4.2 percent in 2022. The 2022 projection is faster than previously envisioned (3.4 percent), owing in part to a robust rebound in domestic demand, particularly in investment.

“Although Poland’s GDP declined in 2020 for the first time in 30 years, the well-diversified Polish economy is one of Europe’s least affected amid the Covid-19 pandemic,” Marcus Heinz, World Bank Resident Representative for Poland and the Baltic States, said.“A key challenge over the short term is to continue supporting the sectors most affected by the pandemic while ensuring public debt sustainability and transparency. Poland also needs to continue strengthening its institutions to prepare for a new wave of absorption of EU funds, a big part of which will go into low-carbon and greener projects,” he added.

The emerging and developing economies in Europe and Central Asia is projected to grow by 3.6 percent this year and by 3.8 percent in 2022, as the effects of the pandemic gradually wane and trade and investment gather momentum. 

The pandemic is expected to erase at least five years of per capita income gains in several of the region’s economies and raise the poverty headcount, largely due to job losses. Overall, despite the rebound in growth, the recovery in per capita gross domestic product (GDP) of the region is subdued and below pre-pandemic trends.

(WBJ)