The European Bank for Reconstruction and Development forecasts that in 2020 Poland will be affected by a 3.5% recession caused by the coronavirus pandemic, but the bank expects a 4% GDP rebound in 2021. The improvement will depend on the easing of restrictions and a return to normality in the second half of 2020.
- Despite the size of the internal market, Poland is strongly integrated into global value chains and has a high exposure to trade, especially within the EU. Therefore, the general decline in demand for Polish products in Western Europe, especially in Germany, has already strongly affected Polish exporters. The share of small and medium enterprises in total employment is also a risk, the EBRD's latest report reads.
Individual economies in the EBRD's regions may shrink by an average of 3.5% this year with a possible rebound of 4.8% in 2021. At the same time, these forecasts are subject to "unprecedented uncertainty". Poland's economic recovery will depend on a gradual easing of national restrictions and a return to normality in the second half of 2020.
- The crisis has been a huge shock, and it will be difficult to get out of it. This is not a time to engage in economic nationalism and protectionism, but a time to shape a better future through international engagement in free trade, climate change mitigation and economic cooperation," said Beata Javorcik, EBRD chief economist.
The recession can be much deeper
The bank's forecast assumes that the crisis will have a limited impact on overall output, with the rebound expected at the end of Q3 2020, while in the longer term the pandemic will have an impact on the economic, political and social structure of the EBRD countries of operation.
"If the social detachment continues much longer than expected, the recession may be much deeper and the 2019 per capita output levels will not be reached again in the coming years", analysts from the European Bank for Reconstruction and Development believe.