Page 14 - Poland Outlook 2024

manufacturing business cycle survey results and trends observed in Eurozone PMI,” PKO BP also said.
Polish manufacturers themselves admit that while the current business environment remains gloomy, there are harbingers of recovery already visible in the improvement of supply chains’ performance
“Most domestic industrial sectors still enjoy a relatively long period of work guaranteed by current contracts, although the situation differs between sectors. The automotive sector in particular presents itself favourably in this respect,” BNP Paribas said in an analysis.
Also worth noting is the accelerating deflation of producer price index (PPI) in the Polish industrial sector (which is in line with the global trend).
Poland's producer price index (PPI) declined 4.7% year on year in November (chart). The PPI has been on a declining trend since September 2022.
3.4 Energy and Power
Poland has been steadily – even if very slowly – reducing the share of coal and lignite in the energy mix. Last year saw a new high in electricity generation from renewables, at 27% of the total 144 terawatt hours (TWh) produced.
So while progress is evident, Poland will still grapple with a host of old problems in 2024 (and many years later). The first is that the slow pace of transition away from coal has “real macro implications” compared to other European emerging markets, according to an analysis by ING.
Poland – and the Czech Republic, which is also reliant on coal, although to a considerably smaller extent than its northerly neighbour – “have a significant shortfall of up to 1% of GDP in their carbon emission allowances (EUAs), which impacts their balance of payments,” ING wrote.
In the case of Poland the shortfall is more than €4bn, which weighs on the country’s FX fundamentals, while the return to a normal relative price relationship between coal and natural gas in late 2023, driven by high and –
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