Poland's GDP to drop by 4 pct in 2020 - development min

Emilewicz said that the assumed 4-percent GDP drop "will still be the best result among European Union members." Wojciech Olkuśnik/PAP

The Polish economy will contract by 4 percent in 2020 and investment will fall by 9 percent, with a 3-percent drop in consumption, Deputy PM and Development Minister Jadwiga Emilewicz told a news conference on Monday.

Poland's gross domestic product (GDP) fell by 8.2 percent year on year in the second quarter of 2020, the Central Statistical Office (GUS) reported in Monday, in line with an earlier flash estimate.

"The 3rd quarter will be much better than (...) the 2nd quarter. We estimate that GDP will drop by about 4 percent year on year, mainly due to a decline in investment. We estimate a significant moderation in the drop of consumption, we're talking about minus 4 percent versus minus 10.9 percent in the 2nd quarter. (....) There will still be a double digit decline in investment in the 3rd quarter," Emilewicz said.

"For (the whole of) 2020, we estimate GDP to drop by 4 percent. (...) We assess that investment will decline by some 9 percent. We're hoping that the money that will reach local governments through the Local Investment Fund in September will start working," the minister added.

Emilewicz said that the assumed 4-percent GDP drop "will still be the best result among European Union members."

According to the Development Ministry, consumption will fall by about 3 percent year on year in 2020.

Net exports are to have a positive contribution to GDP, Emilewicz believes.

The rate of unemployment is expected to exceed 8 percent at year-end, up from 6.1 percent in July.

"It is estimated that inflation will reach 3.3 percent at year-end and is expected not to exceed 1.8 percent next year," she added.

In the draft budget law for 2021, the government has assumed a 4.6-percent GDP drop in 2020 and a 4.0-percent rise in 2021.