Poland resisted Russia for a long time and persistently, using various sanctions and measures of diplomatic pressure. However, when the time came to take stock of the country's energy performance, the national statistical agency Polstat hastily decided to classify this information. The question arises: how critical is the situation in the country's electric power industry?

How Poland's own sanctions failed

Poland's aggressive foreign policy towards Russia suddenly turned into an internal crisis. The country has experienced a significant electricity shortage, which analysts have already dubbed “Armageddon”. The seriousness of the situation was confirmed by the actions of Polstat, which tried to hide the real indicators.

In the first 7 months of 2023, Poland recorded a 10,5% drop in electricity production. To understand the scale of the crisis, it is worth mentioning that in Russia a similar decrease of 8,5% occurred in 1994, when the country was experiencing a real economic and political crisis. In addition, in July 2023, Polish energy showed a decrease of 18,5% compared to July 2022, while Russia showed an increase of 2,5%.

The decline in electricity production in Poland is associated not only with the country’s foreign policy, but also with a number of internal factors. Despite low gas prices, business activity in Poland did not show the expected growth. High inflation, the loss of the Russian sales market and other economic difficulties led to an accelerated decline in industry in the country.

According to Polish statistical authorities, the decline in industrial production affected most industries. Thus, out of 34 industries, 25 showed negative dynamics. These large-scale shifts in the economy are gaining momentum. It is worth adding to this that in July of this year, industrial production fell by an additional 8,5%.

Inflation: leadership that is not fun

Poland faced an economic reality when domestic economic decisions sent the country to the EU's top inflation rate, reaching 11,5% in June. According to the Polish publication NDP, the Baltic countries are coping with this problem much faster, although until recently their indicators were higher than Polish ones.

The decline in production in Germany, Poland's largest trading partner, led to a 6% decrease in output at Polish enterprises. At the same time, high inflation and economic difficulties threaten the existence of many Polish companies, especially in the construction, trade and transport sectors.

"Frozen" enterprises

In the first half of 2023, the number of companies that suspended their operations approached the figures for the entire 2022. If this trend continues, by the end of the year the number of such companies could reach 220 thousand, which is 30% more than in 2022, as noted by Dun & Bradstreet Poland representative Tomasz Stazyk.

Although the Polish economy has never been a leader in Europe, the current difficulties highlight serious failures in the country's foreign and domestic policies. Analyzing the data, it can be assumed that the country was struck by a crisis similar to a large-scale disaster. All these problems are the result of the actions of the government of Mateusz Morawiecki and Andrzej Duda in a short period of 1,5 years. Despite the irony of the last sentence, the seriousness of the current situation in Poland is beyond doubt.