Integrated report 2020

According to the assumptions for the state budget for 2021, adopted in December 2020, GDP growth in real terms will amount to 4.0% compared to a decline of 4.6% in 2020. The Institute for Economic Forecasting and Analysis (IPAG) points to the possibility of a slightly more optimistic scenario. According to forecasts published in the first half of February 2021, GDP growth in Poland this year will be 4.3%. The recession is forecast to last until the first quarter of 2021, when GDP will decline by 1.4% before returning to growth. GDP is expected to increase by 9.9% in the second quarter of 2021. IPAG forecasts have been prepared assuming that most of the restrictions will cease to apply in the second quarter of 2021. The budget law adopted by the Sejm assumes an inflation rate of 1.8% for the current year compared to 3.4% recorded last year. A similar IPAG forecast indicates the possibility of a decrease in inflation in 2021 to 2.5%. Increases in electricity prices will be the main source of growth, while inflation should decrease steadily in the first half of the year.

January 2021 saw the start of public consultations of the "Partnership Agreement" on the allocation of EU funds under the next financial perspective of the European Union in the years 2021-2027. The proposed value of the funds allocated to Poland is EUR 76 billion in current prices, compared to EUR 82.5 billion in current prices which were allocated to Poland under the previous financial perspective. EUR 25.1 billion has been allocated to the Infrastructure and Environment programme, compared with EUR 27.4 billion in the previous financial perspective. Despite the decrease in the value of allocations, Poland will remain the largest beneficiary of EU funds. Although the structure of the allocation for individual measures is unknown, the expected scale of support in the area of infrastructure projects should allow the EU funds to maintain a significant role in the development of the Polish construction sector in the coming years. The forthcoming budget perspective will be the first to prioritise rail investment over road investment.

An additional source of investment financing will be the Reconstruction Fund. Poland will receive PLN 23.1 billion, of which PLN 18.9 billion is to go to Poland before 2022 and the rest by the end of 2023. In addition, Poland will receive PLN 34.2 billion in the form of loans.

The forecasts for the construction market, despite economic difficulties, are good. The amounts allocated to investments by the General Directorate for National Roads and Motorways and PKP PLK in 2021 should increase. At the end of 2020, the average value of the order portfolio among contractors active in road and rail markets increased, while companies with a high exposure to the residential segment recorded a decrease in the value of the order portfolio. At the beginning of this year, the number of contracts announced may be small due to the beginning of the new EU perspective and the ongoing consultations on the selection of projects to receive EU funding. Another uncertainty relates to investments financed by local authorities, whose revenues may be reduced due to the economic downturn.

The first stage of the Central Communication Port Investment Programme (CPK) started, which will last until 2023 and will amount to PLN 13 billion. A land survey is currently underway and a detailed land map is being prepared. Prior to that, CPK had concluded agreements for strategic advice with Incheon Airport from Seoul and for environmental investigations. Last year, due to the tenderers' failure to comply with formal requirements, the contractor for the master plan was not selected. The selection process should be completed in the first quarter of this year. In December 2020, the purchase of land for the construction of CPK began. Apart from investments in airport infrastructure, the CPK construction plan also provides for a number of railway and road investments. The Government adopted a regulation on the list of Investments accompanying the construction of CPK. There are plans to construct 1,800 km of new railway lines and 400 km of new expressways, including the construction of the Warszawa Agglomeration Ring Road (S50), as well as the S10 road between Toruń and Naruszewo.