Russia’s invasion of Ukraine in 2022 has forced countries in the European Union to end their dependence on Russian gas. Although EU imports of gas (including LNG) increased by 37% in 2014-2021, after the invasion daily flows of Russian gas through pipelines to the EU fell sixfold within a year. Of the main gas markets in the EU, Poland — which was historically the most dependent on Russian supplies — managed to reduce its dependence on Russian imports to the greatest extent. Between 2014 and 2021, it reduced gas imports from Russia by 14% and, in Q1 2023, ended them completely. In its report Secure gas supplies for the winters to come. The European path from crisis to independence, the Polish Economic Institute analyses EU countries’ efforts to end their dependence on Russia and increase their energy security.

The Digital Economy and Society Index (DESI) is the main tool used by the European Commission to measure the level of digitalization in EU countries. Although Poland achieved a score of 40.5 out of 100 in the index, placing it 24th among EU countries, the development level of several indicators is approaching that of the classification leaders, including Finland, Denmark, and Estonia. Despite the DESI methodology making it very difficult for member states to make any progress in the ranking, Poland is among the countries that are catching up fastest with the leaders. Currently, the index is undergoing a major transformation as part of the implementation of the Digital Decade, a new EU digitalization strategy. Therefore, changes are necessary in DESI to ensure a more objective assessment of the level of digitalization in individual EU countries, as outlined in the report by the Polish Economic Institute, "How to Measure the Digital Decade - Recommendations for an Evolution of the DESI Index."

Over 1 million Ukrainians who sought refugee after Russia invaded Ukraine in February 2022 are currently in Poland. 80% of them believe that Polish society has a positive attitude towards them. However, Poles’ views on refugees’ situation is clearly changing. The percentage who believe that Ukrainian refugees are in need of assistance has fallen from 84% to 50% since the Russian. In its report Poles and Ukrainians — the challenges of integrating refugees, the Polish Economic Institute analyses Poles’ attitudes towards refugees from Ukraine.

The economic recovery in 2021 contributed to the consolidation of dependence on supplies from China and Russia by increasing imports from there. In 2018-2021, China's share in material consumption in the EU-27 grew by nearly 1%. At the same time, the process of moving production to other (cheaper or safer) countries, as well as bringing it home, has been visible in recent years. In 2021, FDI flows to developed countries increased significantly, compared to flows to developing countries. The total value of greenfield transactions grew by 15%, but fell by 50% in the case of China. FDI to developed countries rose by 134% in 2021 (y/y), according to the Polish Economic Institute’s report The new face of global trade. Are we dealing with reshoring?, which analyses the impact of the pandemic and the war in Ukraine on global production chains.

The Polish economy is at the bottom of the slowdown and inflation has peaked already. We expect inflation to slow down in the coming months and amount to 12.6% in 2023 as a whole. The Polish Economic Institute forecasts that GDP will grow by around 0.8% in 2023 and by 2.2% in 2024. Despite the clear slowdown, the situation on the labour market remains stable. These are the conclusions of the Polish Economic Institute’s “PEI Economic Review: Spring 2023”.

The European Union has been debating the shape of fiscal policy and debt for years.  Polish Economic Institute and the Kiel Institute for the World Economy (IfW Kiel) asked leading EU economists about their opinion about future of the fiscal rules.  Most economists believe that a reform proposed by the European Commission will help to stimulate public investments, which could facilitate green transition of EU’s economies. They do not put much faith in reducing public debt levels, though.

Since the beginning of Russia’s invasion of Ukraine, more than 1 million refugees have found refuge in Poland. It has been reflected in the setting up of new undertakings in Poland. 3,600 companies with Ukrainian capital and 10,200 Ukrainian sole proprietorships were established between January and September 2022. 75 per cent of the businesses surveyed started operating in Poland because their founders needed to earn money to support themselves and their families. At the same time, 66 per cent of them declared that they would continue to operate in Poland regardless of the situation in Ukraine. Those are the conclusions to be drawn from the report of the Polish Economic Institute entitled ‘Ukrainian companies in Poland since the start of the war in 2022’.

Germany has been one of Poland’s key trading partners for years. In 2018, nearly 10 per cent of Polish GDP relied on trade with Poland’s western neighbour, including more than 7 per cent generated by the demand from final customers over the Oder and another 2.6 per cent resulting from German exports of Polish value added. In its report entitled ‘Współpraca handlowo-inwestycyjna Polski z Niemcami’ (Poland’s trade and investment cooperation with Germany), the Polish Economic Institute analyses the trade balance of the two countries with regard to GDP generation and job creation, trade structure and mutual cooperation in the form of direct investment.

As late as 2020, 44 per cent of coal, 45 per cent of natural gas and 25 per cent oil imported to the EU came from Russia. In the energy transition vision adopted by the European Union in the Fit for 55 package, natural gas was meant to serve as a transition fuel. After Russia’s aggression against Ukraine and sharp increases in the prices of all energy raw materials, the model needed to be changed. In May 2022, the European Commission published the REPowerEU plan, assuming the diversification of gas supplies, increased energy production from RES and the development of the hydrogen and biofuel markets. At the same time, the European Commission estimates that the departure from Russian fuels will provide savings of around EUR 100 billion per year. In its policy paper entitled ‘The green transition in the shadow of the war’, the Polish Economic Institute prepared four potential scenarios of the impact of the war in Ukraine and the resulting energy crisis on the European Union’s climate policy, including the future development of the Fit for 55 package.

As calculated by the Polish Economic Institute, the climate cost of Russia’s invasion of Ukraine in the moderate emissions scenario will be 212.7 million tonnes of CO2 equivalent. This is as much as 6 per cent of the equivalent of all the EU’s greenhouse gas emissions in 2022 and 80 per cent of Poland’s annual direct CO2-eq emissions. In the same scenario, the potential climate cost of the invasion could be EUR 16.6 billion. Ukraine’s green recovery could enable as much as 115 million tonnes of CO2 emissions to be avoided and reduce the war’s climate costs by EUR 8.9 billion. A green recovery will also be necessary due to the fact that as much as 4000 MW of renewable energy sources, or 24 per cent of Ukraine’s installed RES capacity, may have been destroyed and damaged – according to the PEI report entitled ‘The climate costs of the Russian invasion’.