Poland, which remained relatively resilient to the 2008/2009 financial crisis, according to Coface this time suffered much more due to the Covid-19 pandemic. Despite government measures, the fall in demand and the restrictions imposed during the first wave of the pandemic led to a significant decline in household consumption, which remains a crucial part of the economy (58% of GDP). In the first half of 2020 alone, household consumption fell by almost 5% year-on-year, while public consumption, supported by extraordinary expenditure, was the only component that increased steadily. The third quarter had ignited hopes that there was a way to recovery, but the second wave of the pandemic reversed this scenario. The labor market has not suffered significantly as a result of the support measures implemented, such as the part-time work program. However, unemployment has risen, reversing the continuing downward trend observed since 2013, which puts further pressure on household consumption dynamics, which are likely to be limited by low confidence in a context of uncertainty, lower employment, and a greater propensity to save. On the other hand, lower employment has reduced labor market resilience due to growing labor shortages. Investment in fixed assets will be reduced as firms still face a higher level of uncertainty and a decline in capacity utilization induced by lower demand. In 2020, companies in various sectors reduced their investments, with the biggest collapses reported by the construction and retail sectors; investment is expected to rebound later this year as the economy gradually recovers. However, improving economic activity would lead to the phasing out of support measures, leading to an increase in unemployment and an increase in business insolvencies. Investments will benefit from EU Structural Funds and the new Next Generation EU fund to address the negative economic consequences of the pandemic: the former amounts to 19.2% of GDP in 2021-2027, while the latter amounts to 12.1% of GDP.

After the relatively low budget deficits recorded in 2018-19, the negative balance of public finances has widened due to the pandemic and the measures implemented to contain its effects. At the same time, the reduction in tax revenues and the sharp increase in expenditure contributed to the deficit. In 2021, the budget deficit is expected to shrink due to the recovery of the economy and the phasing out of fiscal measures. However, analysts expect it will not return below 3% of the GDP threshold level before 2023. The current account balance had risen in positive territory in 2019 and is estimated to have remained there last year thanks to trade in services and trade in goods. Despite falling demand in outside markets at the height of the first wave of Covid-19, Polish exports rebounded relatively quickly due to their competitiveness and inclusion in supply chains. With global trade expected to pick up in 2021, exports are likely to relaunch the balance of goods, but the increase in imports supported by the recovery will limit the contribution of net exports to GDP growth.

The fifth edition of the Coface survey on the payment experience in Poland was carried out in November 2020, with the participation of 330 companies in the study. By this time, Poland was already affected by the second wave of Covid-19, with a significantly higher number of infections than in the first wave of spring. However, lockdown measures were slightly less restrictive last autumn in order to limit economic contraction. According to preliminary data, GDP growth in Poland fell by 2.8% and then will recover later this year to 4.0%.

Despite the deepest recession since the collapse of communism, the Polish economy and businesses have been supported by various government measures aimed at mitigating the impact of the pandemic on entrepreneurial activity. These measures have also affected late payments, which paradoxically have decreased. In fact, Polish companies experienced average payment delays of 48 days last year, which is 9 days less than the previous survey in 2019. The agri-food sector was the best, with payment delays of “only” 33 days. Another paradox is that the greatest improvement in the reduction of delays has been reported by transport (44 days less than a year earlier), despite being the sector at the center of the mobility crisis, followed by the construction sector (25 days less). However, despite these improvements, transport and construction companies again experienced some of the longest payment delays, at almost 78 and 79 days respectively. The energy sector is the one with the longest payment delays, at 80.5 days.

Despite improvements in payment liquidity, most companies said the impact of the pandemic on the Polish economy is a crucial obstacle. Government support measures should end once the economy recovers, so the companies surveyed predict that this will affect the liquidity of companies, especially as half have used liquidity measures such as exemptions and referrals. 7 of the 12 sectors analyzed expect the number of loans in place to increase in the following months.