Polish economy to shrink in ‘20 due to pandemic, but with possible moderate recovery later

The Polish economy is on course to record its first recession in nearly three decades, with an expected contraction of 3.9 percent this year, according to the latest edition of the World Bank’s Europe and Central Asia Economic Update. Easing of pandemic-related restrictions, normalization of economic activity in many sectors, the large economic package being implemented by the government as well as recovery in key trading partners are expected to support a moderate recovery in 2021.

According to the World Bank, growth in Poland is expected to reach 3.5 percent in 2021. The projected recession in 2020 is less pronounced than the 4.2 percent contraction anticipated in June, while the recovery in 2021 is expected to be faster than the previously forecasted 2.8 percent. Considerable downside risks to this outlook persist, however.

“The Polish economy was strong when the Covid-19 pandemic hit. Many years of uninterrupted growth, prudent macroeconomic policies, access to EU funds and social programs have helped cushion the effects of the crisis and limit the negative consequences. At the same time, the pandemic is a reminder that the crisis is sparing no-one. Therefore, we must start investing in a post-pandemic resilient recovery by strengthening health care, education, and improving the investment climate, among other measures,” Marcus Heinz, World Bank Resident Representative for Poland and the Baltic States, said

The pandemic-induced contraction in 2020 is also expected to increase poverty in all countries in Europe and Central Asia. Based on the $5.50 per day poverty line, customarily used in upper-middle-income countries, an additional 6 million people may slip into poverty.

(WBJ)