Economic activity in Poland increased markedly in the third quarter of 2020, but a new blockade led the country to the second bottom of recession in the fourth quarter. Euler Hermes analysts estimate that the short-term economic cost of the second blockade will account for only about 50 percent of the economic effects that Poland suffered in the March-May period. As a result, real GDP is projected to decline by around -4.3 percent in Q4 compared to q / q, and revised upwards from earlier forecasts to -3.7% for the full year 2020.
The full-year forecast of economic growth in Poland in 2021 will amount to + 3.2%, which means a decrease compared to the previous forecast by 1 pp. The main reasons are the transfer of the negative effects of the decline in Q4 2020 to the beginning of 2021 and the gradual lifting of restrictions by the government.
"Therefore, in the opinion of Euler Hermes analysts, after a weak start to 2021, with a slight increase in Q1, there will be Q2, in which the Polish authorities will probably be more cautious than in summer 2020 about reopening the economy. Vaccinations against Covid-19 may have a positive impact on the economy in the second half of 2021, but we don't expect too much next year yet," the report reads.
The so-called The Fiscal Leeway Score indicates that in Central and Eastern Europe: Russia, Bulgaria, Slovakia and the Baltic states still have considerable room for maneuver, maintaining a conservative approach to fiscal policy so far. Poland (like Hungary, Turkey and Croatia) has much less room for fiscal maneuver in 2021. There is still a downside risk on the horizon, and a key factor here is the uncertainty about the development of the epidemic (and the speed of recovery - or the need for a third version in spring).