The sharp decline in Poland’s industry, caused by a 26% decline in coal mining, has raised concerns about the country’s economic growth prospects. In March 2024, coal mining output dropped by 25.9% year-over-year, leading to a 6% decrease in industrial production. This was the largest decline in industrial output since April 2023, surpassing expectations of a 2.2% decline.
Despite the worrisome data, Grzegorz Maliszewski, chief economist at Bank Millennium, remains cautiously optimistic about the economic recovery. He cites increased domestic demand and improving economic conditions in Germany as factors that could contribute to Poland’s projected 3% economic growth this year.
In response to the declining coal industry, Poland’s new government has indicated a willingness to establish an end date for coal use in power generation. Urszula Zielinska, Secretary of State at the Ministry of Climate and Environment, emphasized the importance of setting a clear timeline to facilitate planning for both industries and individuals. Last year, renewables, primarily onshore wind, accounted for a record share of Poland’s electricity generation at 26%, but coal remains the dominant energy source.
To accommodate the growth of renewable and nuclear energy capacity, Poland’s power grid operator has announced plans to invest $16 billion in upgrading and expanding the power grid. These initiatives reflect a broader shift towards cleaner energy sources in Poland’s power sector.
