Tomkiewicz: The Polish economy will keep doping by the government in 2021

If the effect of spring vaccination is not what we expect, then after the large budget deficit and planning for further asset purchases by the NBP, it can be seen that the Polish economy will remain on doping in 2021, prof. Jacek Tomkiewicz from Kuzminsky University.

PAP: Are we able to predict which industries will improve next year?

Jacek Tomkiewicz: We have to start with the fact that this year is very weak in terms of results. So each industry has weakened this year, from this point of view, it will do much better in 2021, and the annual growth will be very large, for example in the hotel or tourism industry.

However, there will also be industries that have also suffered significant declines this year, such as the domestic gigs or the office industry along with the entire service environment, such as catering or cleaning services, but I wouldn’t expect a major rebound next year. It seems that in these areas, epidemic habits will arise: employers will be more brave to use telework, even after the epidemic is over, and the transportation sector will be permanently lost if residents discover that you can do a lot at home and not need as much driving as it was before the epidemic. .

PAP: To what extent should we base our expectations for the coming year on what we know about the behavior of entities in the markets, and to what extent will we depend on management decisions?

JT: There is a possible scenario that despite today’s optimism, it may turn out that the grafting process in the spring will not go as we think. Then, instead of succeeding, we will have a third wave of the coronavirus epidemic and we can expect more restrictions and restrictions.

When it comes to state aid, the draft budget for next year shows continued macroeconomic stimulus, which can be seen through the massive budget deficit planned for next year, assuming 2021 will be the year of economic growth. The asset purchases in the NBP will continue, with interest rates as low as today, so everything indicates that the Polish economy will still be held by the government on doping next year.

PAP: The banking sector threatens to deteriorate in the financial sector, the profitability of banks is declining, and that the Monetary Policy Committee will not be able to rely on a change in interest rates. Is this something that could threaten our economy?

JT: With interest rates as low as they are today, it is clear that the profitability of the banks is declining and the margins in the core area of activity, i.e. credit, are much lower than they were a year ago. However, this is not a problem for the economy, as the financial sector is over-liquid and there is a lot of money in the entire industry. If we add to that the money from the shields that landed on corporate accounts, liquidity is improved during the pandemic, rather than reduced.

However, the low profitability of banks from lending activities will not translate into problems in financing institutions, because there is a lot of liquidity in financial institutions, and the institutions do not appear to suffer from a lack of liquidity.

PAP: What will our foreign trade be like? Should we fight for new markets for Polish exports, but can we count on our exports within the European Union to recover?

JT: First of all, we have to point out that in 2020 exports have been declining, but imports have decreased further, so our trade balance has improved nonetheless. The main recipient of our products was and still is Germany, which is highly industrialized economy, not service oriented, so we have not permanently lost buyers of our products.

It will take some time for supply chains to recover, especially intercontinental ones, but the recipient of 80% of our exports is the European Union, so rebuilding the global supply network and its pace is not very important for the Polish economy.

PAP: Will the changes we observe during the pandemic have long-term consequences, for example in the labor market?

JT: Professions that do not require a physical presence are likely to change their nature, including. When it comes to the time we spend at the office. However, in my opinion, this means that instead of 5 days a week, we will spend 2 days at the company’s headquarters. It’s very likely that there will be a turnaround when it comes to choosing where to stay, but you’ll have to live near Warsaw, Krakow or Wroclaw.

PAP: The time of the pandemic is said to be the period of accelerated digitization. But is this not a temporary trend that will diminish after the epidemic threat subsides?

JT: If we look at the GUS data, you can clearly see that the restrictions restrictions in the second quarter of 2020 and the opening of stores caused a very large drop in e-commerce simultaneously. Therefore, when it comes to digitization and the fact that the pandemic has forced us to break down digital barriers when it comes to e-commerce, e-governance or communication via the web, the news that the internet will replace the following “traditional” industries is greatly exaggerated. We can now see that, after some restrictions on purchases have been lifted, for example, the announcement of the death of the malls was definitely premature. But shopping is a broader experience than simply picking a product and getting it delivered to your doorstep, so in my opinion, we’re going to pretty much revert to the old habits that existed before the pandemic.

Of course, there will be exceptions. For example, citizens and public administration will appreciate the benefits of electronic services, instead of carrying paper documents from one place to another. The same applies to business trips, which are often just for meeting and chatting. This can now be done easily and quickly remotely.

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