Poland’s industrial output suffered a significant decline in March 2024, largely due to a sharp drop in coal mining. Coal mining output fell by 25.9% year-over-year, contributing to a 6% decrease in overall industrial production. This marked the steepest decline in Polish industrial output since April 2023 and exceeded expectations of a 2.2% drop.
The plunge in coal mining has raised concerns about Poland’s economic growth prospects. The country’s central bank and finance ministry had projected a 3% rebound in economic growth this year, but the latest industrial production data cast doubt on this forecast. However, Grzegorz Maliszewski, chief economist at Bank Millennium, believes it’s too early to raise red flags about Poland’s economy. He cited reasons for expecting continued economic recovery, such as increasing domestic demand and improving economic conditions in Germany.
In a bid to reduce its reliance on coal, Poland’s new government has indicated plans to set an end date for coal use in power generation. The Secretary of State at the Ministry of Climate and Environment stated that an end date is necessary for planning purposes. Last year, renewables, particularly onshore wind, generated a record share of Poland’s electricity (26%), but coal remained the dominant source of power.
Poland’s power grid operator recently announced a $16 billion investment to upgrade and expand its grid to accommodate more renewable and nuclear energy capacity. This move aligns with Poland’s efforts to transition to a cleaner and more sustainable energy system.
