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Economic conjuncture

AFTER A DECLINE IN GDP OF MORE THAN 2% IN 2020 ACCORDING TO EUROPEAN COMMISSION ESTIMATES, DESPITE SUCCESSIVE COVID-19 WAVES AND DISRUPTIONS IN SUPPLY CHAINS, GROSS DOMESTIC PRODUCT GROWTH IN 2021 IN POLAND WAS AROUND 5.7%.

The main driver of growth was private demand, clearly revived with the lifting of further COVID-19 restrictions.

Preliminary data for 2021 also indicate a significant recovery in industry resulting in increased investment and inventory levels. Inflation in Poland in 2021 is estimated to be around 5.2% (3.7% a year ago) mainly due to rising prices of services and food.

2021 in the Polish construction sector was marked by a moderate downturn in investment activity in the public segment (i.e. in the transport infrastructure segment and in local governments), which clearly lagged behind construction activity in the private segment (i.e. in the residential, industrial and logistics property segments; investment stagnation still persisted in the office segment).

The biggest challenge for the construction sector in 2021 was the unprecedented rise in material prices.

Reasons for increased prices of materials include: expensive raw materials, disrupted component supply chains, record electricity prices, weak Polish zloty and high demand for materials. The construction sector is highly sensitive to economic fluctuations and changes in the political and legal environment.

Forecast for 2022

ACCORDING TO THE EUROPEAN COMMISSION, THE POLISH ECONOMY WILL GROW AT A RATE OF AROUND 5.5% IN 2022

STRONG PRIVATE CONSUMPTION REINFORCED BY A FAVOURABLE LABOUR MARKET SITUATION AND TAX POLICY ARE EXPECTED TO REMAIN THE MAIN DRIVERS OF GROWTH.

Inflation is estimated to remain high, especially in Q1 2022. For the year as a whole, it is assumed to be around 6.8%. A significant factor adding uncertainty to any 2022 forecast is the war in Ukraine. As of today, there are no reliable forecasts and analyses to clearly assess the impact of hostilities on the economy in 2022.

We are currently in a transition period between successive EU budgets (i.e. the EU budgets for 2014-2020 and 2021-2027) and the release of funds from the National Reconstruction Plan (KPO) is being delayed for political reasons. This is one of the reasons why the scale of new road, energy and local government projects is expected to increase between 2023 and 2024.

China’s construction sector is showing signs of a deeper slowdown, which could contribute to falling prices of basic raw materials such as aluminium and copper. It is important to bear in mind that high demand for construction services, high energy prices, increasing wage pressure, labour shortages and the rising costs of the climate transition for manufacturers will continue in 2022, which will have a direct impact on rising prices of project implementation. The loosening of restrictions related to the COVID-19 pandemic has contributed to an economic recovery and increased demand, which in turn has increased prices of raw materials and construction materials and problems with their availability.

EURO ZONE
2020 2021 2022 (P)
Real GDP [%] -6.4 5.3 3.4
HICP inflation [%] 0.3 2.6 5.4
POLAND
2020 2021 2022 (P)
Real GDP [%] -2.5 5.7 3.3
CPI inflation [%] 3.3 5.1 9.3
Source: Macroeconomic analyses of PKO BP