Poland is addressing a series of economic challenges, including massive flood recovery efforts and a sharp drop in lithium-ion battery exports. While the government rolls out billions in flood relief, backed by EU funds, it also grapples with Intel's decision to halt a major factory project, and rising employment concerns.
The Polish government is currently assessing the extent of damage caused by recent floods, with early estimates suggesting that the total cost could amount to billions of złotys. In response, the authorities have announced a range of financial aid measures aimed at supporting affected households and businesses. Each family impacted by the floods is eligible to receive an immediate, non-repayable emergency grant of PLN 10,000 (€2,200) to cover immediate needs.
Additionally, they can apply for up to 200,000 złoty (€43,500) to repair or rebuild their homes and up to 100,000 złoty (€21,750) to repair or reconstruct farm or other agricultural buildings.
For families with children, the government has also introduced extra support. School-aged children will receive a special one-off grant of 1,000 złoty (€220) as emergency assistance, alongside a further subsidy of up to 1,540 złoty (€335) to cover costs for what are termed “therapeutic trips” – presumably aimed at helping children recover from the emotional and psychological impact of the disaster. For younger children, particularly those in the first three years of primary school, an additional grant of up to 500 złoty (€110) is available to fund therapeutic and educational activities.
The initial fund allocated for these relief efforts is 2 billion złoty (€435 million), but the Polish finance minister has confirmed that this amount could be increased depending on the scale of need. These funds will be distributed to affected regions through local governors, and the money will then be passed on to municipalities for direct assistance. Those needing financial help must apply through their local town or village hall or the local social services office within 30 days of the flood.
To further alleviate the financial strain on affected families, the Polish government has also announced that it will cover the mortgage repayments of flood victims for up to 12 months. Meanwhile, the Polish Bank Association is working on plans to defer payments on other types of loans for flood-affected individuals.
Additionally, they can apply for up to 200,000 złoty (€43,500) to repair or rebuild their homes and up to 100,000 złoty (€21,750) to repair or reconstruct farm or other agricultural buildings.
For families with children, the government has also introduced extra support. School-aged children will receive a special one-off grant of 1,000 złoty (€220) as emergency assistance, alongside a further subsidy of up to 1,540 złoty (€335) to cover costs for what are termed “therapeutic trips” – presumably aimed at helping children recover from the emotional and psychological impact of the disaster. For younger children, particularly those in the first three years of primary school, an additional grant of up to 500 złoty (€110) is available to fund therapeutic and educational activities.
The initial fund allocated for these relief efforts is 2 billion złoty (€435 million), but the Polish finance minister has confirmed that this amount could be increased depending on the scale of need. These funds will be distributed to affected regions through local governors, and the money will then be passed on to municipalities for direct assistance. Those needing financial help must apply through their local town or village hall or the local social services office within 30 days of the flood.
To further alleviate the financial strain on affected families, the Polish government has also announced that it will cover the mortgage repayments of flood victims for up to 12 months. Meanwhile, the Polish Bank Association is working on plans to defer payments on other types of loans for flood-affected individuals.
Support has also been extended to businesses affected by the disaster. Deadlines for tax payments have been pushed back, with VAT payments postponed until January 25 next year, and tax deadlines deferred until businesses file their annual tax returns. Companies must submit their applications for aid to tax offices rather than local government bodies. Furthermore, funds will be made available to help preserve jobs in companies that have had their assets damaged or whose operations have been disrupted by the floods. This financial support will go towards employee wages in businesses that are struggling to continue trading.
EU Also Offers Support
Perhaps most crucially, financial assistance has been secured from the European Union. In an unusual move, the EU has allowed Poland to draw on €5 billion from the cohesion funds allocated to the country for use by 2027. The key difference here is that, unlike typical EU funding, these funds are available immediately rather than being reimbursed at the end of the investment process. Even more importantly, Poland will not be required to provide any matching funds, as is usually the case with EU projects.
Additionally, Poland's finance minister, Andrzej Domański, has announced that all spending related to flood relief will be exempt from the EU's excessive deficit procedure. This means that the additional expenditure will not count against the country's budget deficit, which is already under pressure, and will not lead to further complications in Poland's fiscal management, even though the flood relief efforts may result in a higher public sector deficit this year.
EU Also Offers Support
Perhaps most crucially, financial assistance has been secured from the European Union. In an unusual move, the EU has allowed Poland to draw on €5 billion from the cohesion funds allocated to the country for use by 2027. The key difference here is that, unlike typical EU funding, these funds are available immediately rather than being reimbursed at the end of the investment process. Even more importantly, Poland will not be required to provide any matching funds, as is usually the case with EU projects.
Additionally, Poland's finance minister, Andrzej Domański, has announced that all spending related to flood relief will be exempt from the EU's excessive deficit procedure. This means that the additional expenditure will not count against the country's budget deficit, which is already under pressure, and will not lead to further complications in Poland's fiscal management, even though the flood relief efforts may result in a higher public sector deficit this year.
Overall, the Polish government’s response combines both immediate financial relief and longer-term support, leveraging domestic resources and EU funds. However, given the scale of the damage, this is likely to be just the beginning of a more extensive and sustained recovery effort in the months to come.
Battery Exports Plummet as EV Demand Declines in EU
The Polish Economic Institute reported a significant decline in the export of lithium-ion batteries from Poland. From January to the end of July this year, exports fell by 58.2%, with revenue from these exports dropping for the fifth consecutive quarter. In the peak first quarter of 2023, revenues exceeded €3 billion, but they now stand at less than €1.5 billion. The main cause of this downturn is the declining demand for electric vehicles (EVs) in Germany and across the eurozone, Poland’s primary market for these exports.
Recent data shows that the sale of new electric cars in Europe was down by 44% in August compared to the previous year. As demand for EVs shrinks, so too does the demand for the batteries that power them. This poses a significant challenge for the Polish economy, which, until recently, had been seen as an emerging powerhouse in this sector. Unfortunately, the changing market dynamics are now spelling trouble for Polish exporters.
Intel Halts Plans for Polish Factory Amid Financial Struggles
In another blow to Poland’s economy, American tech giant Intel has suspended its planned construction of a semiconductor facility near Wrocław in western Poland. Announced in June 2023, the project was valued at around $4.6 billion and was expected to create 2,000 jobs. The plant was intended to handle semiconductor testing and integration, forming part of Intel's broader European strategy, which included a facility in Ireland and another planned factory in Magdeburg, Germany. Together, these facilities were expected to create a comprehensive and cutting-edge semiconductor supply chain within Europe.
However, Intel has shelved these plans, including the €30 billion investment in Germany. The reason for the suspension is Intel’s financial troubles. Once a global leader in the semiconductor industry, the company now faces mounting challenges. Intel posted nearly $2 billion in losses during the first half of this year, and its debt has ballooned to close to $50 billion. The company’s stock price has plummeted by 58% this year, reaching its lowest level since 2013.
According to the Wall Street Journal, Intel’s competitor, Qualcomm, has shown interest in acquiring the struggling firm. Intel’s difficulties have also put on hold significant government investment incentives. The Polish government had promised Intel a package worth złoty 2.7 billion (€580 million), while in Germany, the support package was estimated to be as high as €9.9 billion.
Battery Exports Plummet as EV Demand Declines in EU
The Polish Economic Institute reported a significant decline in the export of lithium-ion batteries from Poland. From January to the end of July this year, exports fell by 58.2%, with revenue from these exports dropping for the fifth consecutive quarter. In the peak first quarter of 2023, revenues exceeded €3 billion, but they now stand at less than €1.5 billion. The main cause of this downturn is the declining demand for electric vehicles (EVs) in Germany and across the eurozone, Poland’s primary market for these exports.
Recent data shows that the sale of new electric cars in Europe was down by 44% in August compared to the previous year. As demand for EVs shrinks, so too does the demand for the batteries that power them. This poses a significant challenge for the Polish economy, which, until recently, had been seen as an emerging powerhouse in this sector. Unfortunately, the changing market dynamics are now spelling trouble for Polish exporters.
Intel Halts Plans for Polish Factory Amid Financial Struggles
In another blow to Poland’s economy, American tech giant Intel has suspended its planned construction of a semiconductor facility near Wrocław in western Poland. Announced in June 2023, the project was valued at around $4.6 billion and was expected to create 2,000 jobs. The plant was intended to handle semiconductor testing and integration, forming part of Intel's broader European strategy, which included a facility in Ireland and another planned factory in Magdeburg, Germany. Together, these facilities were expected to create a comprehensive and cutting-edge semiconductor supply chain within Europe.
However, Intel has shelved these plans, including the €30 billion investment in Germany. The reason for the suspension is Intel’s financial troubles. Once a global leader in the semiconductor industry, the company now faces mounting challenges. Intel posted nearly $2 billion in losses during the first half of this year, and its debt has ballooned to close to $50 billion. The company’s stock price has plummeted by 58% this year, reaching its lowest level since 2013.
According to the Wall Street Journal, Intel’s competitor, Qualcomm, has shown interest in acquiring the struggling firm. Intel’s difficulties have also put on hold significant government investment incentives. The Polish government had promised Intel a package worth złoty 2.7 billion (€580 million), while in Germany, the support package was estimated to be as high as €9.9 billion.
Intel’s halted expansion marks a significant setback for both Poland and the wider European semiconductor industry, at a time when securing local chip production is considered a strategic priority.
Declining Employment in Poland’s Larger Enterprises Amid Rising Wages
Polish companies employing at least 10 people are seeing a notable reduction in their workforce. According to data from the Central Statistical Office (GUS), August saw a decrease of 18,800 employees, bringing the total loss since January to 45,700 workers. Despite this decline in employment, wages continue to rise. In August, average wages were 11.1% higher than in the same month last year, reflecting a real increase of 6.5% in earnings. The current average gross wage stands at 8,189.74 złoty (€1,910).
While average wages continue to rise, the gap between the average and median wage remains significant. Earlier this year, the median wage in Poland was reported to be around 23% lower than the average. Based on these proportions, the current median wage is estimated to be between 6,300 złoty and 6,400 (€1,470-1,490) gross.
Despite the shrinking workforce, the Polish Economic Institute (PIE) considers the reduction in employment as relatively minor, though it has been sharper than expected. Analysts from PKO BP, however, noted that this year's employment declines are substantial compared to previous years, and the anticipated recovery in demand for labour is being delayed.
Poland to Launch Real Estate Price Website – But Not Anytime Soon
The Polish government has drafted a bill that will establish a real estate price website, reviving an idea first proposed under Mateusz Morawiecki, the prime minister in the previous government. The project has now entered the consultation phase. The portal, called the Real Estate Market Data Portal (Portal DOM), will be managed by the Insurance Guarantee Fund (UFG) and will provide statistics on transaction prices in the housing market. Users will be able to sort the data based on factors such as the number of rooms, floor space, whether the property is on the primary or secondary market, and its location.
The website will gather transaction data from notaries via the National Tax Administration, and for the primary market, developers will also be required to submit information. While the platform promises greater transparency in Poland’s real estate market, its launch is still a long way off. The bill must first be approved by the government, then passed by Parliament and signed by the President. Furthermore, the legislation stipulates that the website will only go live 20 months after the law is published, as this time is needed to build the necessary IT infrastructure.
This move is part of broader efforts to provide greater transparency in Poland’s real estate market and is expected to be a valuable tool for both buyers and sellers. However, the long wait for its implementation means that it won't be available to users for at least a couple of years.
Music Sales Surge in Poland with CDs Outselling Vinyl
Music sales in Poland have seen a significant increase, with a unique trend standing out compared to global markets: compact discs (CDs) continue to outsell vinyl records. This contrasts with markets like the US, where vinyl sales have overtaken CDs.
According to the Polish Society of the Phonographic Industry (ZPAV), total music sales in the first half of this year reached 392 million złoty (€87.5 million), a 31.6% rise from the same period last year. Digital formats, predominantly streaming, now account for around 80% of the market, with physical formats like CDs and vinyl making up the rest.
Interestingly, the balance between digital and physical sales has remained steady for the second year in a row, indicating that the growth of streaming may have plateaued. Both digital and physical sales are expanding at a similar rate, with digital sales growing by 31.4% and physical sales by 32%. Within the physical segment, CD sales increased by 40.1% to złoty 48.7 million (€10.8 million), while vinyl sales grew by 20.4% to złoty 28.8 million (€6.4 million). The price difference could be a factor, with vinyl records often costing two to three times more than CDs.
The Polish music market is heavily dominated by domestic artists, particularly in the hip-hop genre. In the first half of 2024, the top-selling albums were by Polish artists. Billie Eilish's latest album was the only international release to make the top 10.
Ukraine’s Economy Continues to Grow Despite Ongoing War
Ukraine’s GDP has shown resilience in the face of the ongoing conflict, Russian bombardments, and attacks on the country’s energy infrastructure. In August, Ukraine's GDP grew by 3.5%, with year-on-year growth from January to August reaching 3.9%. Government forecasts predict the country's GDP will continue to grow at a rate of 3.5% for the year.
Despite these positive figures, Ukraine’s economy remains about 23% smaller than it was before the Russian invasion. In 2022, the year of the invasion, Ukraine's GDP plummeted by 29%, and the recovery since then has been slow and challenging. In 2023, the GDP saw a 5.3% increase, largely thanks to international financial aid.
Yulia Svyrydenko, Ukraine's deputy prime minister, noted that the availability of electricity in August slightly improved, which helped boost morale among business owners and maintain economic growth momentum.
Declining Employment in Poland’s Larger Enterprises Amid Rising Wages
Polish companies employing at least 10 people are seeing a notable reduction in their workforce. According to data from the Central Statistical Office (GUS), August saw a decrease of 18,800 employees, bringing the total loss since January to 45,700 workers. Despite this decline in employment, wages continue to rise. In August, average wages were 11.1% higher than in the same month last year, reflecting a real increase of 6.5% in earnings. The current average gross wage stands at 8,189.74 złoty (€1,910).
While average wages continue to rise, the gap between the average and median wage remains significant. Earlier this year, the median wage in Poland was reported to be around 23% lower than the average. Based on these proportions, the current median wage is estimated to be between 6,300 złoty and 6,400 (€1,470-1,490) gross.
Despite the shrinking workforce, the Polish Economic Institute (PIE) considers the reduction in employment as relatively minor, though it has been sharper than expected. Analysts from PKO BP, however, noted that this year's employment declines are substantial compared to previous years, and the anticipated recovery in demand for labour is being delayed.
Poland to Launch Real Estate Price Website – But Not Anytime Soon
The Polish government has drafted a bill that will establish a real estate price website, reviving an idea first proposed under Mateusz Morawiecki, the prime minister in the previous government. The project has now entered the consultation phase. The portal, called the Real Estate Market Data Portal (Portal DOM), will be managed by the Insurance Guarantee Fund (UFG) and will provide statistics on transaction prices in the housing market. Users will be able to sort the data based on factors such as the number of rooms, floor space, whether the property is on the primary or secondary market, and its location.
The website will gather transaction data from notaries via the National Tax Administration, and for the primary market, developers will also be required to submit information. While the platform promises greater transparency in Poland’s real estate market, its launch is still a long way off. The bill must first be approved by the government, then passed by Parliament and signed by the President. Furthermore, the legislation stipulates that the website will only go live 20 months after the law is published, as this time is needed to build the necessary IT infrastructure.
This move is part of broader efforts to provide greater transparency in Poland’s real estate market and is expected to be a valuable tool for both buyers and sellers. However, the long wait for its implementation means that it won't be available to users for at least a couple of years.
Music Sales Surge in Poland with CDs Outselling Vinyl
Music sales in Poland have seen a significant increase, with a unique trend standing out compared to global markets: compact discs (CDs) continue to outsell vinyl records. This contrasts with markets like the US, where vinyl sales have overtaken CDs.
According to the Polish Society of the Phonographic Industry (ZPAV), total music sales in the first half of this year reached 392 million złoty (€87.5 million), a 31.6% rise from the same period last year. Digital formats, predominantly streaming, now account for around 80% of the market, with physical formats like CDs and vinyl making up the rest.
Interestingly, the balance between digital and physical sales has remained steady for the second year in a row, indicating that the growth of streaming may have plateaued. Both digital and physical sales are expanding at a similar rate, with digital sales growing by 31.4% and physical sales by 32%. Within the physical segment, CD sales increased by 40.1% to złoty 48.7 million (€10.8 million), while vinyl sales grew by 20.4% to złoty 28.8 million (€6.4 million). The price difference could be a factor, with vinyl records often costing two to three times more than CDs.
The Polish music market is heavily dominated by domestic artists, particularly in the hip-hop genre. In the first half of 2024, the top-selling albums were by Polish artists. Billie Eilish's latest album was the only international release to make the top 10.
Ukraine’s Economy Continues to Grow Despite Ongoing War
Ukraine’s GDP has shown resilience in the face of the ongoing conflict, Russian bombardments, and attacks on the country’s energy infrastructure. In August, Ukraine's GDP grew by 3.5%, with year-on-year growth from January to August reaching 3.9%. Government forecasts predict the country's GDP will continue to grow at a rate of 3.5% for the year.
Despite these positive figures, Ukraine’s economy remains about 23% smaller than it was before the Russian invasion. In 2022, the year of the invasion, Ukraine's GDP plummeted by 29%, and the recovery since then has been slow and challenging. In 2023, the GDP saw a 5.3% increase, largely thanks to international financial aid.
Yulia Svyrydenko, Ukraine's deputy prime minister, noted that the availability of electricity in August slightly improved, which helped boost morale among business owners and maintain economic growth momentum.
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