Press release

Published: 31/08/2020

At the start of April, 18% of companies surveyed did not have financial liquidity, and just 26% said that the financial resources available will enable them to operate for more than three months. However, at the start of July, just 5% of companies lacked financial liquidity and as many as 60% had the financial means to operate for more than three months. Companies’ staffing plans calmed down, too. At the beginning of April, 28% of companies surveyed said they were reducing employment; at the start of July, it was just 6%. According to a report by the Polish Economic Institute, The Polish economy under lockdown. Poland compared to the rest of Europe, at the start of the lockdown, three-quarters of companies predicted that recovery from the pandemic would not take longer than a year. Today, nearly one-third assume that this state will go on for many years.

The report sums up research conducted by the Polish Economic Institute (PIE) with the Polish Development Fund (PFR) on Polish companies between the start of April and the start of July 2020. It shows the state of the Polish economy during the quarantine, but also how it changed over time: first, during the lockdown, and then as it was lifted.

“To sum up the opinions expressed by entrepreneurs during the six phases of the research, we constructed a synthetic Entrepreneur Sentiment Index that takes into account opinions on the value of sales, the number of new orders, a subjective assessment of financial liquidity, and planned changes in employment and the remuneration of employees. It shows a clear improvement in the situation: from -36.1 points at the start of April, it increased to +9.9 points at the start of July. Its growth was closely related to the unfreezing of the economy from mid-May, as well as the introduction of anti-crisis shields by the Polish government. Positive reactions were first observed among production companies; in mid-June, they were joined by commercial companies,” said Piotr Arak, director of the Polish Economic Institute.

The Polish economy compared to other EU countries

In March 2020, industrial production in all European Union countries declined by 10.8% compared to February. In April, it fell by 18.2% compared to the previous month. These were the sharpest-ever monthly decreases recorded by Eurostat, significantly larger than those linked to the financial crisis in late 2008 and early 2009.

In Poland, the fall in sold production of industry was well below the EU average in March (7.4%), but exceeded it in April (21.1%).

In the EU’s 27 member states, the lockdown caused retail sales to drop by 9.8% in March compared to the previous month, and by another 11.4% in April. Polish companies felt the consequences of the restrictions slightly less: the drop amounted to 7.1% in March and 7.7% in April.

The unfreezing of the economy around the start of May led to an increase in the value of retail sales; by 16.4% in the EU as a whole and by 10.1% in Poland. As a result, retail sales in the EU in May amounted to 93.0% of their value in February, before the pandemic; in Poland, this was 94.4%. Polish companies were therefore coping slightly better than other European ones.

“The studies conducted by PFR and PIE showed that the worst moment for Polish companies was at the end of April, when over two-thirds of companies surveyed reported a decrease in sales, and just 7% an increase. In May, the situation improved: 43% of companies reported a fall and 20% an increase. At the start of July, the percentage of companies reporting a fall declined to 36%. At the same time, during the whole period studied, large and medium-sized enterprises coped better with the crisis caused by the pandemic,” said Paula Kukołowicz, an analyst at PIE, who co-authored the report.

Changes on the labour market caused by the pandemic

The coronavirus pandemic pushed up registered unemployment in Poland. In June 2020, it amounted to 6.1%, with 1.03 million unemployed people registered at employment centres, 150,000 more than during the same period in 2019. We observed the first signs of rising unemployment in April, when the number of registered unemployed people rose by 56,400 compared to March. It increased by 45,900 in May and by 14,800 in June.

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The Polish Economic Institute is a public economic think-tank dating back to 1928. Its research spans trade, macroeconomics, energy and the digital economy, with strategic analysis on key areas of social and public life in Poland. The Institute provides analysis and expertise for the implementation of the Strategy for Responsible Development and helps popularise Polish economic and social research in the country and abroad.

Media contact:
Agata Kołodziej
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tel. 48 727 427 918