Warsaw, 11th February 2021
“Lockdown Loss Meter” hanged in Warsaw. What amount does it show?
On the façade of the Warsaw-based pub “Świetlica Wolności” (The Freedom Lounge), several screens making up the Lockdown Loss Meter were hanged. In total, since March 2020, the Polish economy has already lost over PLN 30 billion as a result of the lockdown.
The unfreezing of the economic – scheduled for 12th February 2021 – is only partial, as it concerns cinemas, hotels, theatres and ski slopes, and temporary, because the return to the restrictions after 2 weeks is a real possibility. What this means is that the Polish economy is still struggling with a creeping lockdown. The Lockdown Loss Meter shows in real time the cumulative economic loss in terms of lost income since the first lockdown in the spring last year, as well as it informs in detail about the losses in four critical industries that either were or are ‘frozen’ (restaurants and related businesses, fitness, entertainment, hotels). The Meter is going to be updated depending on the current changes in the sanitary regime. Its creators, the Warsaw Enterprise Institute and the Union of Entrepreneurs and Employers, believe the losses incurred as a result of the lockdown were unnecessary The economy should function continuously provided a stricter sanitary regime is maintained.
The calculations by WEI and the Union indicate that the spring lockdown caused the greatest damage to the economy. At that time, Poland’s GDP decreased by 0.74%. The decrease was mainly induced by restrictions in retail trade and the related closure of shopping centres and agri-food markets. The drop in value added generated by the retail trade sector reached PLN 5.47 billion. Being an indirect effect, further drop values also occurred in sectors related to retail trade: wholesale trade – PLN 4.10 billion, industry – PLN 0.45 billion, energy – PLN 0.17 billion, and transport – PLN 0.21 billion. In the case of individual services, such as hairdressers and beauticians, losses resulting from the spring lockdown amounted to PLN 1.03 billion. Such sectors as entertainment and culture, tourism, sports and recreation, air transport and hotel industries also recorded steep declines.
According to preliminary estimates of the Central Statistical Office of Poland, the gross domestic product (GDP) in 2020 was lower in real terms by 2.8% compared to 2019. Of course, this decline is not only the result of economic restrictions, but also of a decline in foreign demand and consumer moods as well as increased sanitary precautions. However, the Meter – whose operations are based on the input-output model – sifts these phenomena away, focusing only on the losses caused by the lockdown. It takes into account not only the income lost in frozen industries, but also the indirect impact that freezing them had on other sectors.
The Meter is also available online: http://licznik.wei.org.pl/
It will be taken down when the last industry is ‘unfrozen’ and all lockdown policies finally abandoned.