Business is brisk at the petrol station in Warsaw’s Zoliborz distract, with motorists queuing up anxiously to fill up their cars.
At least there’s petrol today. A month ago Orlen, Poland’s state-owned energy giant with a third of the petrol market, dropped prices at its stations by around 12 per cent. Many stations ran out of petrol entirely for days after a run by bargain-hunting Polish – and Czech – motorists.
On Thursday, the price for unleaded was still a bargain at 5.99 zloty (€1.28) per litre, but some customers have mixed feelings about the real cost.
“I’m happy as a driver but this price cut has not come from some magical fairy,” said Dominika, a 52 year-old Warsaw woman. She sees the price cut as a ploy to massage the economic data and boost third-term hopes of the ruling Law and Justice (PiS) party.
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An older man says the price cut is “obviously political, this country is led by idiots who think short term and do not see the consequences it will bring after the election”.
Petrol prices, the cost of living and their effects on inflation – which peaked at 18.4 per cent in February – have placed economic concerns right at the heart of Poland’s general election on Sunday.
Poland’s economy... has become one of the sturdiest in central Europe, diversifying to partner with the German automotive industry and stealing some of Ireland’s thunder as a hub for tech companies and outsourced services
Orlen insists it is not acting politically and that the Polish petrol price fall, unique in Europe, is influenced by a variety of factors including “raw material costs, fiscal burdens and production and service costs”.
That said, Orlen chief executive Daniel Obajtek, a PiS appointee, has said it is “no secret” that he is a donor to the ruling party and wants it to win.
Interest-rate cut
The price cut also appear remarkably well-timed, allowing Poland’s central bank governor Adam Glapinski to announce a return of single-digit inflation.
He surprised analysts with an interest-rate cut of 75 basis points at a press briefing two weeks ago. That dramatic announcement paled next to a remarkable 30-minute tirade by Mr Glapainski – another PiS appointee and old friend of party chairman Jaroslaw Kaczynski – against critical media outlets and concerned economists whom he suggested were “lying non-stop” about Poland’s economic outlook.
“They want to harm Poland,” he insisted, echoing a common PiS narrative in the election campaign. “We are witnessing a great success. I am sorry that this success has now come before the elections.”
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Poland’s economy – after years of sturdy and crisis-resilient growth – has become one of the sturdiest in central Europe, diversifying to partner with the German automotive industry and stealing some of Ireland’s thunder as a hub for tech companies and outsourced services.
But it has had to weather numerous shocks in the 18-month fallout from Russia’s invasion of Ukraine, pivoting its economy away from its larger eastern neighbour while managing a mass influx of Ukrainian refugees.
Recent expansion by German car companies has made Poland the world’s fifth-largest producer of electric vehicle batteries
After negative GDP data in the first half of the year, the outlook remains gloomy but not entirely bleak: ING bank has more than halved its most recent growth forecast to just 0.4 per cent.
Other risks remain unresolved, in particular the unresolved rule-of-law standoff with Brussels over contested PiS reforms of the Polish judiciary.
Fears that this row would throttle foreign direct investment have proven unfounded, considering Intel’s plan to invest €4.3 billion in a new semiconductor plant, the largest such plan in Polish history, creating 2,000 jobs. Recent expansion by German car companies, meanwhile, has made Poland the world’s fifth-largest producer of electric vehicle batteries.
Its jobless rate of 2.7 per cent, tied with the Czechs for the EU’s lowest, masks a growing skills shortage.
Economic powerhouse
In August the UK’s National Institute of Economic and Social Research (NIESR) praised Poland as an emerging economic powerhouse in central Europe.
Even with the pandemic, the NIESR calculated that Poland has enjoyed a 10.8 per cent GDP expansion since the final quarter of 2019, second only to Ireland in the EU.
As Poles go to the polls on Sunday, Antrim native Ruairi O’Neill, a Warsaw-based law lecturer and president of the Irish-Polish Chamber of Commerce, says the level of Irish business interest in Poland remains high. Of particular interest are the new opportunities of the post-Covid world.
“When it comes to reshoring, bringing back investment from China and elsewhere,” he said, “Poland is the biggest beneficiary in Europe.”
