Vanishing point

Economic Analysis | MACROscope

A strong economic revival is still on the horizon, but is like a vanishing point – moving further away even as we travel in that direction. The third wave of the Covid-19 pandemic in Poland is in full swing and has already proven to be more severe than the previous one (yet still less deadly, hopefully thanks to the vaccination of the elderly population). The restrictions introduced so far by the government are a bit tougher than those seen in the autumn and winter but unless they prove to be "too little, too late" to tame the virus spread, they should not change the economic outlook drastically. A sharp pickup in GDP growth is still possible before the year end, in our view, but may be delayed vs. our previous forecast. We lower our 2021 GDP growth forecast to 4.2%, but lift our estimate for 2022 to 5.1%. Consensus forecasts for the European economy are moving in a similar direction (...).


Reflation fever

Economic Analysis | MACROscope

Spring is coming but although it is getting warmer outside we would have to wait a bit more for the economic activity to heat up more broadly. We already see some evidence of the third wave of the Covid-19 infections in Poland rising, so it is quite likely that the partial relaxation of restrictions that took place in mid-February will have to be reversed in the coming weeks, which will keep services sector and the private consumption under pressure. Actually, the government has already started restoring restrictions on a regional level. At the same time, the pace of inoculation has been accelerating and Poland looks well in this area when compared to the other EU countries. However, this is still not enough to see any desired effects soon. (...)