Economic forecast for the years 2021/2022 by the Union of Entrepreneurs and Employers

Warsaw, 10^th June 2021

Economic forecast for the years 2021/2022 by the Union of Entrepreneurs and Employers

The economic slowdown in Poland in 2020 turned out to be milder than on average in the European Union. Poland’s GDP in 2020 shrank by mere 2.8%, while the GDP of the eurozone decreased by 6.6%.

At the beginning of the COVID-19 pandemic, the Polish economy was in a relatively better position compared to other economies. The most important factor due to which recession in Poland in 2020 was milder was the small share of sectors temporarily excluded from all activity as a consequence of anti-pandemic restrictions in the generation of added value in GDP along with the structure of exports constituting mostly of consumer goods, as well as the relatively smooth course of the crisis in Germany, Poland’s main trading partner.

Poland’s dynamically evolving macroeconomic situation directly impacts the condition of the enterprise sector. In order to better understand the processes taking place in this environment, the Union of Entrepreneurs and Employers has decided to publish its own economic forecast for the next two years.

The forecast was modelled on the basis of a proprietary econometric model (description of methodology included in the document) and takes into account key macroeconomic indicators, i.e. unemployment rate, inflation rate, GDP growth rate and investment rate (in relation to GDP). The current forecasts are as follows.

Unemployment
2021: 6.1%
2022: 5.9%

Inflation
2021: 4.0%
2022: 3.1%

GDP growth
2021: 4.0%
2022: 5.1%

Investment rate (% of GDP)
2021: 16%
2022: 17.2%

Basing on the forecast for 2021-2022, three factors can be identified that will have the greatest impact on the condition of enterprises in the years to come. These are the following: a significant slump in corporate investment during the crisis and the future impact of post-crisis pro-investment packages targeted at specific industries; wage pressure as a result of high inflation, a mismatch between the structure of supply and demand in the changing labour market, and the low unemployment rate; non-uniform inflation striking harder industrial sectors and those that cannot freely shape the prices of their products and services or easily renegotiate contracts.

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Economic forecast for the years 2021/2022 by the Union of Entrepreneurs and Employers