Investment rate, i.e. the share of investment in GDP, it reached a new all-time low of 16.6% in the third quarter of 2022. – enumerate the economists of Santander Bank Polska in the latest report. This is a big deal for usbecause it is thanks to investments that employers can increase the efficiency of their production, and with the decrease in the number of working people in Poland, it is a key mechanism for keeping long-term inflation in check (The higher the productivity, the easier it is to manage a small number of employees and keep costs under control, which do not have to be passed on to product prices later on).
– At the moment we cannot activate anti-development mechanisms. There is a lot of success in our economy, a lot of good, but there are also some disturbing phenomena, such as a low level of investment. Not even we have solved, here I am beating my chest, the housing problem – the president told Chojnice PiS Jaroslaw Kaczynski.
Investment rate in Poland at the lowest level in history
In 2021, the investment rate in Poland was 16.7%. – the same as in the 2020 pandemic. This was the lowest share of investment in GDP since the early 1990s and the lowest, next to Bulgaria, in the entire European Union.
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See also: Entrepreneurs have been sounding the alarm for years. The head of PiS only now became aware of the problem
The government assumed that by 2020 the investment rate in our country would be between 22 and 25 percent. And the 20 percent level, which the United Right inherited from the POPSL extensionequally low and unsatisfactory.
Unfortunately, next year doesn’t look good either. “We believe investment in 2023 will look very thin and we expect them to decrease in real terms”, warn Santander experts.
Scarce investments next year? What can hinder companies?
As they point out, the inflow of EU funds and, consequently, the volume of investments financed from this source is already slowing down. “The extended freeze on KPO payments will negatively impact investment by local governments and businesses. In recent quarters, local administrations have maintained a positive growth rate in investments despite the decline in the value of investments financed with EU funds.
However, we do not believe this situation will persist in the long term. Similarly, the weak inflow of EU funds will weigh on business investment. Indicators of investment optimism among entrepreneurs are still at a very low level and financial results are rapidly deteriorating, suggesting a decline in investment in this sector, they warn.
However, the government’s frantic pursuit of budget cuts in recent weeks suggests so the realization of public investments could be affected. The sector’s capital expenditure could be supported by an increase in defense spending, they explain.
In summary, according to them, investments will decrease by about 1 percent. in 2023, 3% each increase in 2022
Investments cannot take off. How come?
Why is this happening? The list of entrepreneurs’ accusations against Mateusz Morawiecki’s team is long. Lack of dialogue with business, conflict with the EU, last minute tax hikes, chaos in the judiciary or poor quality law are just the beginning. We can multiply the examples.
– It’s the government’s fault. That’s not how business changes are made – Kamil Sobolewski, chief economist of Employers of Poland, told the Money.pl program on Monday.
One of the most glaring examples of disrespect for dialogue with business was 2019. Then it’s in the spring Ministry of Finance under the government of Teresa Czerwińska in the State Long-Term Financial Plan, among others an increase in the index excise tax to the level of inflation, i.e. about 2.5 percent.
The honesty of the Ministry of Finance of PiS was very inconvenient, because a few months later they were detained parliamentary elections. Czerwińska left the ministry, the plans were put in a closet, raise the excise duty three times more than previously announced immediately after the election.
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