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REPORT: Energy and economy. Is polish prosperity threatened by growing energy prices?

Polish consumers of electricity and heat are in a kind of no-win trap, as a result of which the high energy costs they incur not only now, but also in the future, are likely to be among the highest in Europe. It is not industry, but consumers and small service companies that bear the burden of the high cost of fuel imports resulting from both the weak zloty exchange rate and shortages of coal, oil and gas on world markets. Read the Energy and economy. Is polish prosperity threatened by growing energy prices? report written by Maciej Bukowski and Krzysztof Bocian.

The primary cause of the surge in fuel and energy prices in the global economy over 2021-2022 was the COVID-19 pandemic and the fiscal response of OECD governments to it. The increase in energy prices in 2021 was compounded by about a third by Russia’s aggression against Ukraine in February 2022. The increase in fossil fuel prices is the main reason for the corresponding increase in wholesale electricity prices in almost all of Europe. In most EU Member States – including Poland – the amount of zero- emission capacity is still too small to determine the price of electricity. 

How much can the costs of heating and lighting Polish homes can increase and how will this affect the financial situation of Poles and the Polish economy? Is there a recession ahead? What steps should be taken to prevent negative scenarios – or at least minimize the negative effects of rising fuel and energy prices?