Poland’s industrial output fell most since April 2023 due in part to lower coal production, reducing the outlook for economic growth.
Industrial output in the European Union’s most coal-reliant nation fell by 6% in March from the same month a year ago, while economists surveyed by Bloomberg saw it shrinking by 2.2%. Coal mining dropped 25.9% while electrical appliance production declined 29.1% from a year earlier.
Bank Pekao SA analysts, led by Ernest Pytlarczyk, said the data amounted to a “massive drop” in industrial output. Monika Kurtek, chief economist at Bank Pocztowy SA, said it was now “unrealistic” for Poland’s first-quarter gross domestic product to expand by 2% or more — adding that growth is now seen at 1% to 1.5% year-on-year.
Bank Millennium SA economists, led by Grzegorz Maliszewski, see the fall in output as a “short-term disruption,” unlikely to change the outlook for monetary policy. While his 2.3% forecast for first quarter GDP growth is likely to be missed, revival remains the “base case scenario” over future quarters, he said.
“Due to high core inflation, as well as high wage growth, the MPC will keep interest rates unchanged in the coming months,” Maliszewski said.
Poland produced 64% of its electricity by burning coal in the first quarter, down from 68% last year. Meanwhile, solar energy output jumped 40% in March, compared with a year earlier, limiting demand for the dirty fuel, according to data from the country’s power grid. The latest detailed data for February show the country’s coal stocks more than doubled compared with the same period of last year.
The zloty traded 0.2% against the euro following the data.