Macroeconomic environment

Value lever (driver) prospects Market environment

TAURON Group’s core business operations are conducted on the Polish market and TAURON Group takes advantage of the positive trends occurring thereupon as well as it is affected by the changes thereof. The macroeconomic situation, both in the individual sectors of the economy as well as on the financial markets, is a significant factor impacting the earnings generated by TAURON Group.

The greatest challenge facing all of the world’s economies in 2020 was the COVID-19 pandemic. The introduced restrictions aimed at curtailing the increase in the number of cases had an impact upon the functioning of the world’s economies and, as a consequence, they slowed down (contracted) by 4.3%.

According to the forecasts of the World Bank, the growth rate of the global economy will come in at 4% in 2021. The eurozone experienced a recession of 7.5% in 2020. In the coming years the economic growth rate is expected to stand at 3.2% in 2021 and 4% in 2022.

The outbreak of the COVID-19 pandemic, the restrictions imposed and the persistent high uncertainty about how the situation will evolve in the future contributed to a reduction in economic activity and a slowdown of Poland’s economic growth at the level of approx. 2.8% (according to data from the Central Statistics Office (GUS)). The National Bank of Poland (Narodowy Bank Polski – NBP) predicts a recovery of the economic growth in the second half of 2021. This will be driven by a gradual increase in private consumption, a moderate improvement of the labor market and the changes in consumer preferences. In its November 2020 forecast the NBP estimated Poland’s GDP growth rate to reach 3.1% in 2021 and 5.7% in 2022. The World Bank, on the other hand, forecasts that Poland’s GDP growth rate in 2021 will clock in at 3.5% in 2021, and at 4.3% in 2022.

Over the next two years, a moderate increase in consumption is forecast. Due to the deterioration of the consumers’ income situation, private consumption will be characterized by a gradual improvement. The rise of consumption in the public sector will be affected by the increase in health care expenditures related to the COVID-19 pandemic and the use of the tourist vouchers, while the freezing of wages in the state budget sector in 2021 will have a negative impact. The return to the neutral fiscal policy is not expected until the end of 2022.

In 2020, there was a collapse of investment outlays in the enterprise sector, with spending falling by approx. 15%. Currently, one fourth of the enterprises assume that they will rebuild their investment activities later than in a year, while 50% believe that it is difficult to assume anything.

The inflation rate clocked in at approx. 3.5% in 2020, year over year. The increase of the inflation rate was, first and foremost, the result of the strong growth of the prices of services. Over the next two years the inflation rate is expected to come in at approx. 2.5%.

The registered unemployment rate in Poland stood at approx. 6.1% in 2020 (in 2019 it came in at 3%) and is likely to remain at this level in 2021.