The COVID-19 pandemic has unleashed an unprecedented health and economic crisis. Nonetheless, the fall in national GDP has proved to be relatively small: -1.7% and -2.7% in the third and fourth quarters of 2020, compared to respective quarters in 2019. Moreover, Poland started 2021 on a strong economic footing, and it is expected that the negative impact of the pandemic on economic activity will be temporary. Overall, real GDP growth is projected to reach 4.8% in 2021 and 5.2% in 2022.
In 2020, the government launched a number of tools to support domestic entrepreneurs. The “Anti-crisis Shield” included the so-called Financial Shields in the form of financial subsidies for SMEs and in the form of the preferential financing for large companies, which were worth a combined total of PLN 71.37 billion (July 2021). Bank Gospodarstwa Krajowego provided support worth PLN 93.84 billion (July 2021) in the form of accessible guarantees, such as de minimis guarantees (the maximum amount of this guarantee was lifted from 60% to 80%) and liquidity guarantees (a new measure to improve the financial liquidity of medium-sized and large companies). The Anti-crisis Shield also covered other measures such as social insurance exemptions, subsidies to the remuneration of employees and idle- time benefits. The government support under the Anti-crisis Shield has amounted in total to over PLN 236 billion as of July 2021. These measures have significantly mitigated the effects of the crisis in the non-financial corporate sector.
In 2019, there were 2 211.6 thousand non-financial enterprises in Poland, which is 2.9% more than the previous year. SMEs dominate the business landscape in Poland, constituting nearly 99.9% of all firms. Micro-enterprises (less than 10 people employed) alone account for 97% of all companies in the country.
In 2020, the banking sector has remained stable. As a result of the reforms implemented after the 2008-2009 global financial crisis, the Polish banking system has generally become more resilient to shocks, due to stronger capital and liquidity buffers. In 2020, decreasing debt growth was observed among both large companies and SMEs. The biggest decline was observed in corporate loans, which to a large extent were replaced by the fiscal support provided by the government. At the end of 2020, the proportion of firms that did not experience liquidity problems reached a historical high, primarily as a consequence of the state aid liquidity measures under the Financial Shields.
The stock of outstanding business loans and SME loans slightly declined in 2020, which could be driven by a decline in credit demand and an increase in repayment rates. From March to the end of August 2020, a substantial increase in the value of corporate deposits was observed, explaining current lower demand for loans. Furthermore, at the end of 2020, over 94.5% of companies declared timely settlement of credit liabilities. There has also been a rather sustained upward trend in the volume of SME long-term loans. The share of non-performing loans (both total and SME) increased slightly in 2020, but remained visibly below the 2010 peaks reached after the financial crisis. The average interest rate, both for SMEs and large companies, declined in 2020. Similarly, the interest rate spread also fell to 0.14 percentage points. This decline can be explained by the important government support through the de minimis Guarantee Fund.
Venture and growth capital investments expanded in 2020 by almost 22% compared to 2019. In 2020, the financial results of the Warsaw Stock Exchange Group were among the best in its 30-year history. Seven companies were newly listed on the main stock market (including two transfers from the junior market, New Connect) and 14 companies were newly listed on New Connect.
