Poland overview

Poland stadium and cityscape

In Poland we focus on:

Promoting the low carbon economy. Coal still accounts for more than 80 percent of Poland’s primary energy supply and the economy remains among the least energy efficient in the EU. Promoting low carbon solutions, energy efficiency and reduction of green-house gas (GHG) emissions will therefore remain a key strategic priority for the Bank’s operations over the coming years. The Bank will continue to support diversification of energy and fuel supplies (especially in renewable energy) and improving energy efficiency (both on the demand and supply side), together leading toward a more sustainable energy market in the country.

Enhancing the private sector’s role in the economy. The Polish state continues to play a significant role in the economy, notably in the power, chemical, natural resources, transport and municipal sectors. Accelerating the implementation of the structural reform agenda is crucial to consolidate transition and support the recovery that has slowed markedly. The Polish authorities have acknowledged the need to push ahead with greater market liberalisation. Moving Poland toward a more resilient economic model built on private investment and productivity increases will also require more innovation, providing risk capital and corporate restructuring (operational and financial), and will include supporting Polish companies in their regional expansion and cross-border investments.
Assisting in the development of a sustainable financial sector and capital markets. Although the banking system remained sound in the course of the crisis, a number of systemic vulnerabilities emerged, especially banks’ balance sheet mismatches, lack of sponsors liquidity support and the need for consolidation. In the current environment, high risk aversion by banks and deteriorating credit quality in the economy are leading to substantial financing constraints, in particular for small and medium sized companies and in the poorest regions. EBRD will assist in the development of a more sustainable financial sector by helping banks address crisis-inherited vulnerabilities and promoting the development of local currency capital markets in order to reduce the sector’s dependence on foreign financial inflows.
As well as being a country where the EBRD works, Poland is also an EBRD donor. Poland became a donor to the EBRD in 2005, providing Technical Cooperation support in the Western Balkans. It contributes to the Eastern Europe Energy Efficiency and Environment Partnership (E5P) and in 2013 pledged to raise its total commitment to €1.3 million. In 2015, Poland also became a donor to the EBRD's Ukraine Stabilisation and Sustainable Growth Multi-Donor Account.                   
The EBRD's latest Poland strategy was adopted on 11 April 2018.

Current EBRD forecast for Poland’s Real GDP Growth in 2018:  4.7%

Current EBRD forecast for Poland’s Real GDP Growth in 2019:  3.6%

The Polish economy grew by 5.1 per cent year-on-year in the first half of 2018, amid continuously robust household consumption and improved investment, the latter growing at 6.0 per cent year-on-year. Public investment has been expanding for some years, while private sector investment has finally showed early signs of recovery since the second quarter of 2018, driven mainly by foreign-owned companies and in sectors such as machinery, technical equipment, tools and transport.

The expansionary fiscal policy and improving labour conditions underpinned the solid household consumption growth. GDP growth may have peaked in mid-2018, but it is expected to remain robust over the forecast horizon. Amid increasing inflation, household consumption will likely soften to some extent, but the tightening labour market, noticeable largely in rising wages, will keep it at a high level. Investment is expected to continue its recovery, in particular in the public sector.

The labour market is undergoing a major structural shift. Labour supply is falling due to aging, a decreased retirement age, and lower participation of women because of higher social benefits. A counter-balancing factor is a surge in immigration, mostly from Ukraine and Asia. On a net basis, labour issues constitute a limiting factor for almost 50 per cent of companies in Poland, according to the third quarter of 2018 European Commission business survey. While difficulties in employing new workers may be a factor in favour of greater automatization in about 16 per cent of companies, according to a local employment agency, the shortage of workers has already delayed investment plans. This is especially visible in the construction sector.

A possible delay in the recovery in private investment of domestic companies constitutes a downside risk to GDP growth. Global trade disruptions contribute also to that uncertainty. As a result, GDP growth in 2018 is forecast to reach 4.7 per cent in 2018 before it slows down to 3.6 per cent in 2019.

Poland in the EBRD's 2018-19 Transition report