In 2020, the Polish economy contracted by 2.8%. This is the first year-on-year decline in Poland’s GDP since 1991. Compared to other EU 27 countries, however, this is one of the best results. Only Ireland did better, with GDP growth of 2.5%, and Lithuania, which recorded a decline of 0.8%. Already in 2021, a relatively strong growth of 3.9% is expected, thereby surpassing the performance of the economy in 2019.
Poland should maintain a growth level of around 4% in 2022 and 2023. In addition, Poland also shows good numbers in unemployment statistics – compared to 2019, there was only a slight increase of 0.5% to a total of 5.9%. The number of unemployed will peak this year at 6.5%. In the following years, it will again go below the 6% threshold.
In response to the effects of the coronavirus pandemic, the Polish government introduced a set of anti-crisis measures called Tarcza Antikryzysowa. The measures are announced gradually in waves according to the current state of the economy and the restrictive measures adopted by the government. The goal is to prevent the demise of companies and prevent the increase in unemployment. Tarcza Antykryzysowa offers, for example, concessions from health and social insurance, non-refundable loans or takeover of the company’s shares by the state.
The condition is that the company drawing state aid has tax residence in Poland or undertakes to transfer it to Poland within 9 months. Most measures are financed through the Polish Development Fund (Polski Fundusz Rozwoju, PFR) and the National Bank of Poland (Narodowy Bank Polski, NBP). This solution makes it possible to at least formally limit the increase in public debt.
The increase in the public finance deficit for 2020 was nevertheless the most significant in recent years, namely at the level of 10.5% of GDP. Although a significant reduction of the deficit to 4.3% in 2021 and 3.2% in 2022 is to follow, these are still higher deficits than in previous years (for example, in 2019 the deficit of public finances was only 0.7% of GDP).
The country’s total debt in relation to GDP thus increased from 45.7% in 2019 to 54.7% in 2020. Here, however, Poland is in a very good position compared to other EU countries. Moreover, the higher public finance deficit is redeemed by a lower decline in GDP and an early return to growth in 2021.
Post-COVID-19 opportunities for foreign exporters
Transport industry and infrastructure
According to allcountrylist, the basic framework for investments in road infrastructure is determined by the National Road Construction Program for the period 2014–2023 with a view to 2025 (Program Budowy Dróg Krajowych na lata 2014–2023 z perspektuą do 2025). The total volume of investments within the program reaches PLN 14billion (CZK 853.20 billion). In total, it expects to build 3,568.1 km of new roads; of which 32km of highways and 2,749 km of expressways. The remaining part consists of bypasses and Class I roads.
The program also envisages connecting the network of highways and roads connected to the construction of the Central Transport Hub (Centralny Port Komunikacyjny – CPK), including the new major bypass of Warsaw. CPK connecting road, rail and air transport is to become an integrating element of the development of transport infrastructure across the whole of Poland in the future. The site designated for the construction of CPK is located approximately 37 km west of Warsaw by the newly built A2 highway.
Furthermore, the Ministry of Infrastructure developed a program for the construction of 100 urban bypasses throughout Poland in the period 2020-2030, which will complement the activities of the General Directorate of Roads and Highways (Generalna Dyrekcja Dróg Krajowych i Autostrad, GDDKiA) related to the aforementioned National Road Construction Program. The cost of implementing the program was estimated at almost PLN 28 billion (CZK 168 billion).
Another important investment program of the Polish government is called Bridges for the Regions (Mosty dla Regionów). This program envisages the construction of 21 new bridges over the largest Polish rivers. Funds from the state budget in the amount of PLN billion (CZK 1billion) were set aside for the fulfillment of the program’s tasks.
The share of the installed power of thermal power plants on black and brown coal in the energy mix of Poland is 65.1% of the total energy output. The second most important component of the energy mix is renewable energy sources with a 24.6% share, followed by natural gas power plants with 6.2%.
Regarding the specific production of electricity in 2020 – coal-fired power plants produced a total of 69.7% of the total volume of energy produced. Thus, their share of annual production fell below 70% for the first time in the history of the Polish energy industry. Renewable energy sources accounted for 17.7% of the annual production, while gas power plants accounted for 10.1%. The remaining 2.5% is accounted for by other energy sources.
The dominance of coal in the Polish energy mix will continue for many years to come and will generate strong demand in this segment. According to available data, the average age of a thermal power plant in Poland is 47 years (counted from the commissioning of the first unit). Half of them are over 50 years old. Poland will be forced to decommission these outdated technologies and replace them with more modern technologies by 2030 at the latest due to stricter environmental protection rules adopted at the EU level.
In the field of renewable resources, the Polish government’s priorities are the development of photovoltaics and, above all, wind power plants. The share of the installed capacity of wind power plants in Poland’s energy mix was 12.6% in 2020. The share of actually produced energy is then equal to 10%. A special law to support offshore wind farms was signed by the Polish president in January 2021 (the so-called “offshore” law). Using a strategic investment program worth up to PLN 130 billion (CZK 780 billion), 8-11 GW of power is to be installed in Poland’s exclusive economic zone in the Baltic Sea by 2040.
The heating industry is also a technologically lagging sector of the energy sector in Poland and therefore has great potential for development. The Polish government is now preparing a strategy for the transformation of the heating industry. In the perspective to 2040, a reduction in the role of natural gas is expected, a further intensive increase in the share of renewable energy sources and waste heat, and a shift away from centrally supplied systems to the integration of heat pumps at various points of heating systems.
In addition to energy production itself, the transmission and distribution network will also require investment. By 2030, the Polish government plans to allocate a total of over PLN 14 billion (CZK 84 billion) to investments in the transmission and distribution network.
The growth of e-commerce is particularly dynamic in Poland. According to available estimates, the Polish e-commerce market grew by more than 30% to EUR 15 billion (CZK 390 billion) in 2020, which is the fastest growth in Europe. In 2015, Polish e-commerce was worth EUR billion (CZK 137 billion), and in 2019 it was EUR 1billion (CZK 303 billion). Today, 72% of Internet users make purchases using e-shops. Compared to 2019, this is an increase of 15%. Compared to 2015, even by almost 50%.
The state supports businesses with innovative potential, special emphasis is placed on technology companies and startups. For example, the Start in Poland government program has PLN 3 billion (CZK 18 billion) of funding available through subsidy titles from national and EU sources. In order to obtain support from EU sources, Polish companies usually need cooperation with foreign partners, which means opportunities for Czech technology companies and startups.
Demand for Shared Service Centers and outsourcing services for businesses (Business Process Outsourcing) is also growing in Poland. The strongest demand in the market for shared and outsourcing services will be in the areas of IT research and development, legal services, engineering services, application development and maintenance in the coming years.
Healthcare and pharmaceutical industry
In the case of Poland, opportunities in the healthcare and pharmaceutical industry are not exclusively tied to the fight against the covid-19 disease. Polish healthcare has been underfunded for a long time, and its additional funding is one of the government’s priorities.
Since 2017, an amendment to the Act on Healthcare Services Financed from Public Funds has been in effect (Ustawa o przyszkości szczytnej szczyniej finansowanych ze przyszczownych public funds), which envisages a gradual, fixed increase in expenditure on health care.
In 2025, expenditures are to reach the level of 6% of GDP (for comparison in 2021, the level of 5.3% of GDP is calculated). In the course of the following years, more than 30 hospitals and other healthcare facilities are to be modernized in Poland. It is mainly about the purchase of equipment and the construction of new hospital buildings.
The Ministry of Health also perceives the need to improve care for the elderly through the development of day care homes, care and treatment facilities (Zakłady Opiekuńczo-Lecznicze) and centers for people over 75 years of age. The value of the private healthcare market is also growing strongly. And by an average of 7% per year from PLN 22 billion (CZK 132 billion) in 2018 to an estimated PLN 31 billion (CZK 186 billion) in 2022.
According to available forecasts, the number of oncology patients will increase in Poland in the next 15-20 years. The Ministry of Health therefore allocated a total of PLN 900 million (approximately CZK billion) for the revitalization of the National Oncology Institute (Narodowy Institut Onkologii). In the coming years, it will be necessary to implement modern methods of cancer treatment, including cell therapy using CAR T-lymphocytes, into the Polish healthcare system.
The application of artificial intelligence in the diagnostic and therapeutic process in oncology is one of the research and development priorities in the field of healthcare in Poland.
Another important topic in the Polish healthcare industry is digitization. From January 2021, electronic medical recommendations, so-called e-skierowanie, were implemented, electronic medical records (Elektroniczna Dokumentacja Medyczna) are also in an advanced stage of implementation. In the future, the development of new solutions in the field of digital medicine, remote provision of health services and remote consultation (telemedicine) will be necessary.
The market for non-commercial clinical testing is very promising, which is now worth approximately PLN 2 billion (CZK 12 billion) per year, with the assumption of extensive growth in the future (up to three times the current value). Solutions based on nanotechnology and biomaterials also have great potential in the Polish healthcare sector. In connection with the spread of the disease covid-19, the Agency for Medical Research (Agencja Badań Medycznych) plans to release funds for the development of vaccines, therapies and rapid diagnostic techniques.
Rail and rail transport
Railway and rail transport has long been a very promising field in which several Czech companies have already successfully established themselves. Its development is also among the government’s priorities and the main goals of the Ministry of Infrastructure. The main instrument is the National Railway Program (Krajowy Program Kolejowy).
In the period until 2023, it stipulates a total of 230 projects and investment expenditures in railway infrastructure in the amount of almost PLN 76 billion (CZK 456 billion). One of the key priorities of the National Railway Program is the improvement of the technical condition of railway lines included in the main comprehensive TEN-T network.
The Polish government also adopted a resolution on the introduction of the Program for Supplementing Local and Regional Railway Infrastructure by 2028 (Program Kolej+). The goal of the program is to introduce rail connections to cities with more than 10,000 inhabitants. residents who currently do not have access to passenger or freight rail transport. Almost PLN billion (CZK 39.6 billion) is allocated for the implementation of the program for the years 2019–2028. An investment program was also established, which aims to build and modernize railway stations throughout the country.
The program is to be implemented by 2023 and includes a total of 186 buildings worth PLN 1 billion (CZK 6 billion). The state railway company PKP Intercity has announced a new strategy for rolling stock, which foresees investments for the modernization and purchase of rolling stock in the amount of more than PLN 7 billion (CZK 42 billion) by 2023. The program includes the modernization and purchase of new rolling stock, locomotives and electrical units.
The development impulse of railway modernization is also the construction of the ambitious Central Transport Hub (Centralny Port Komunikacyjny – CPK). The transport hub should be the axis of the matrix for the national railway network, which envisages the connection of 10 routes and the construction of 17 new railway sections with a length of 1,300 km with a projected speed of 150 km/h and the possibility of conversion to a high-speed railway. The first to be built is the Warsaw–CPK–Lodz high-speed line, which is already included among the so-called Connecting Europe Facility (CEF) projects.