The first macroeconomic data that were meant to give us some answers about the state of Polish economy concerned industrial output. They were very concerning. What is important, the negative trends were visible not only in Poland (where, according to the Central Statistical Office (GUS), industrial production in March fell by 2.3% year on year), but above all in Germany, which is the main recipient of our Polish exports - almost 30% of the total value of goods exported from Poland goes to Germany. Meanwhile, industrial production in Europe's largest economy fell by nearly 12% in March, which was the worst result since the reunification of Germany in 1990.
Exports are up
Meanwhile, our exports in the first quarter seem to be not particularly impacted by these trends. According to the Central Statistical Office (GUS), the annual growth rate of Polish exports (i.e. compared to the same period in 2019) was equal to 0.6%.
- These numbers are truly incredible - comments Piotr Soroczyński, chief economist at the Polish Chamber of Commerce. He is quick to emphasize that economists expected a deep slowdown in exports.
The reasons for these dire expectations are known to everyone: smaller orders, stoppage of work of plants that produce mainly for foreign markets (especially in the automotive industry) and difficulties with the flow of goods related to closed borders. Soroczyński himself admits that in March alone he expected a drop in exports from the February level of 20 billion to 17 billion. - It turns out that there was no reduction. If such data were published in normal times, I would say that yes, they are a little weaker, but there is absolutely no reason to complain," he points out. "And yet the coronavirus's impact on the economy was very strong".
There was no radical change with respect to exports to Germany. In fact, after the first two months of the year it was 0.5 percent lower, but over the span of the entire first quarter it is 0.5 percent higher! - Similar developments can be seen with respect to exports to the rest of the Eurozone. It amounts in total to just one percent decline - says Soroczynski.
April will be much worse. But it doesn't have to be bad in May
How did our exports manage to do so well at the beginning of the crisis? According to Soroczyński, we may have focused too much on the stories of those whose situation really became dramatic. And that's the angle from which the forecasts were calibrated. Meanwhile, the only major correction occurred in just one export sector, i.e. production of machinery, equipment and transport equipment. Its share dropped from 38% to 37%. In normal times, changes in this sector are small, within tenths of a percentage point.
There is also no doubt that April will be worse. This is due to the fact that the production stoppage, e.g. at car manufacturers, usually took place only in the last week of March. And their defrosting started a month later. "So there are reasons to believe that May will end up being somewhere between the results from March and those from April" - says Soroczyński - "This gives hope that this year will not be as disastrous as we feared. Although of course it will be bad", he concludes.
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