Ip245 en

ISSN 2443-8014 (online)
2023
Country
Report
Poland
INSTITUTIONAL PAPER 245 | JUNE 2023
EUROPEAN ECONOMY
Economic and
Financial Affairs
Secretariat-General
Recovery and
Resilience Task Force
European Economy Institutional Papers are important reports analysing the economic situation and
economic developments prepared by the European Commission's Directorate-General for Economic and
Financial Affairs, which serve to underpin economic policy-making by the European Commission, the Council
of the European Union and the European Parliament.
This paper has also been published as Staff Working Document SWD(2023) 621.
This specific report was prepared in cooperation with the Secretariat-General Recovery and Resilience Task
Force, with valuable contributions from Eurostat, Directorate-General for Employment, Social Affairs and
Inclusion, Directorate-General for Climate Action, Directorate-General for Environment, Directorate-General for
Regional and Urban Policy, Directorate-General for Structural Reform Support, Joint Research Centre,
Directorate-General for Energy, Directorate-General for Mobility and Transport, Directorate-General for
Internal Market, Industry, Entrepreneurship and SMEs, Directorate-General for Communications Networks,
Content and Technology, Directorate-General for Research and Innovation, Directorate-General for Education,
Youth, Sport and Culture, Directorate-General for Migration and Home Affairs, Directorate-General for Health
and Food Safety, Directorate-General for Financial Stability, Financial Services and Capital Markets Union,
Directorate-General for Taxation and Customs Union, Directorate-General for Justice and Consumers, and
Directorate-General for Translation.
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for the use that might be made of the information contained in this publication.
This paper can be downloaded from https://economy-finance.ec.europa.eu/ecfin-publications_en.
Luxembourg: Publications Office of the European Union, 2023
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CREDIT
Cover photography: © iStock.com/Teka77
European Commission
Directorate-General for Economic and Financial Affairs
Secretariat-General
Recovery and Resilience Task Force
2023 Country Report

Poland
EUROPEAN ECONOMY Institutional Paper 245

EUROPEAN
COMMISSION
Brussels, 24.5.2023
SWD(2023) 621 final
COMMISSION STAFF WORKING DOCUMENT
2023 Country Report - Poland
Accompanying the document
Recommendation for a COUNCIL RECOMMENDATION
on the 2023 National Reform Programme of Poland and delivering a Council opinion on
the 2023 Convergence Programme of Poland
{COM(2023) 621 final}
EN EN
ECONOMIC AND EMPLOYMENT SNAPSHOT
and nominal wage growth, as well as an

expansionary fiscal stance.
Russia’s war of aggression against
Ukraine has impacted the economy Unemployment remains at historically
low levels and one the lowest in the EU,
giving rise to acute labour shortages. A
The Polish economy recovered quickly record low unemployment rate has led to the
from the COVID-19 pandemic, but re-emergence of shortages of workers. Low
economic growth is expected to stall in labour market participation of some
2023.Poland was one of the fastest-growing population groups, and a decline in the
economies in the EU during the post-pandemic working-age population keep weighing on
period, benefiting from strong policy support, labour supply. This is in turn holding back
low unemployment, and continued inflows of Poland from fully implementing the European
foreign direct investment. However, Russia’s Pillar of Social Rights and achieving its
invasion of Ukraine has put significant national employment target for 2030 (see
pressure on the economy. Elevated commodity Annex 14). At the same time, business surveys
prices are weighing on both real disposable suggest that firms are having problems
incomes (i.e. incomes adjusted for inflation) finding people with the right skills, pointing to
and consumption growth, especially given the significant skills mismatches. The labour
high share of energy in the consumer basket. market adjustment to the expected slowdown
High uncertainty, a deteriorating business in economic growth is expected to come from
sentiment, and the increased cost of borrowing lower wage growth rather than from an
are impacting economic activity, particularly increase in unemployment, as firms are
investment. As a result, the Commission’s reluctant to lay-off workers given the strong
forecast projects economic growth to slow difficulties they face in hiring. The 2022 ‘Polish
considerably in 2023 and stand below the EU Deal’ tax reform is estimated to have lowered
average. the tax burden on labour benefitting more the
lower income employees as well as older
Inflation has soared amid rising global workers delaying retirement, while it increased
energy prices and domestic demand the tax wedge ( 1) for higher-income self-
pressures. Poland’s inflation rate is expected employed. The reform should also boost the
to remain one of the highest in the EU in 2023 labour supply over the medium term ( 2).
and 2024. The energy-price shock in 2022
came on top of global supply-chain disruptions The successful integration of displaced
and strong growth in global commodity prices. persons from Ukraine has helped the
This has increased operating costs for labour market, but challenges remain. The
businesses, which – given exceptionally high
demand – encouraged firms to raise the prices
they charge for consumer goods. As the (1) The tax wedge is the ratio of personal income tax and
employer and employee social-security contributions
economy decelerates, inflation is set to start (SSCs) less family benefits divided by total labour costs.
gradually decreasing amid an easing of supply
(2) European Commission, Joint Research Centre,
bottlenecks, weakening domestic demand and calculation based on the EUROMOD model version
a fall in global commodity prices. I5.0+. Labour-supply reactions are estimated through
Nevertheless, risks of persistently elevated EUROLAB (for details, see Narazani, E., Colombino, U.
inflation exist given high inflation expectations and Palma B., (2021) ‘EUROLAB: A Multidimensional
Labour Supply-Demand Model for EU Countries’,
European Commission, JRC127383).
2
unprecedented support to the roughly 1 million are at solid levels and well above regulatory
displaced persons from Ukraine ( 3) who settled minima. Banking profitability improved
in Poland contributed to their speedy significantly following the increase in interest
integration into the jobs market. According to rates, but could suffer in the future from the
the OECD ( 4), these are estimated to have costs associated with the potential annulment
increased labour supply in Poland by 2.1% by in courts of legacy foreign-currency-
the end of 2022, easing the shortage of denominated mortgages in addition to costs of
workers, especially in services. Although 60% the mortgage repayment holidays adopted by
of those settled in Poland by April 2022 had the government in July 2022. This could also
found work, many face underemployment and have implications for credit supply (see Annex
skills mismatches ( 5). Moreover, the sudden 18). Private sector lending, in particular
increase in population has added to housing housing loans, cooled down rapidly in 2022
needs in regions where these were already amid a rise in borrowing costs and stricter
considerable before the war, and it puts strain bank lending standards.
on public services, including the education
system (see Annex 17). In 2022/23, over Public finances are under strain. According
192 000 out of an estimated 500 000 to the Commission’s forecast, the budget
displaced children from Ukraine in Poland were deficit is expected to increase from 3.7% of
enrolled in schools and pre-schools, which GDP in 2022 to 5.0% of GDP in 2023. Total
increased the total numbers of children in spending on defence is also expected to
school and pre-school by 3%, and by even increase, while continued energy support
more in large urban areas ( 6). measures are also weighing on the budget.
Total expenditures on aid to displaced persons
Poland’s competitiveness has remained from Ukraine, which in 2022 were the highest
resilient to the energy shock and the in the EU, are set to decrease. While most of
rising labour costs. The rise in energy prices the energy support measures are assumed to
globally led to a strong terms-of-trade shock be withdrawn, the personal income tax reform
over 2022, which contributed to a significant (the ‘Polish Deal’) introduced in 2022 has
deterioration in Poland’s current account permanently lowered government revenues
balance. Still, cost-competitiveness remained (see Annex 19). In 2024, the deficit is forecast
stable on the back of a depreciation of the to decrease to 3.7% of GDP. The ratio of public
zloty and gains in labour productivity. This was debt to GDP is set to remain below 60%, while
reflected in strong exports, as evidenced in an increasing moderately until 2024.
increase in global market share by Polish
exporters, as well as strong inflows of foreign Challenges remain in the sustainability,
direct investment. Poland’s labour costs efficiency, and transparency of public
remain among the lowest in the EU. finances. Retaining the very low retirement
age (for women and some professional
The banking sector is showing resilience. groups) amid a rapidly ageing population risks
The Polish banking sector recovered rapidly either a future increase in old-age poverty or
from the pandemic, driven by strong GDP substantial increases in future public spending
growth in 2021 and early 2022. Solvency on pensions. This could put pressure on the
remains adequate, while funding and liquidity sustainability of government finances over the
medium-to-long term. In recent years,
improved tax compliance has contributed to
(3) The distinctive number of persons holding a refugee higher government revenues, but there
status was 997 thousand as of 27 March 2023.
remains considerable scope to increase the
(4) OECD (2022). ‘The potential contribution of Ukrainian efficiency of public spending on social
refugees to the labour force in European host countries’, benefits, public investment, and public
OECD Publishing, Paris.
procurement. The role of both independent
(5) OECD (2023), OECD Economic Surveys: Poland 2023, fiscal oversight and the medium-term
OECD Publishing, Paris.
budgetary framework remains limited, and
(6) Union of Polish Cities (2022), Urban hospitality: recent budgetary practices relying on off-
unprecedented growth, challenges and opportunities.
3
budget funds reduce transparency and the role amid: (i) a deterioration in indicators of
of the parliament. governance quality; (ii) a lack of effective
public consultation; and (iii) weaknesses in
public procurement (see Annexes 12 and 13).
Concerns persist over the rule of law in Poland,
Tackling structural challenges will including the independence of the judicial
support sustained growth system. The perceived level of effectiveness of
investment protection by the law and courts is
very low among companies compared with the
Productivity growth has been strong, but EU average (see Annex 12).
Poland’s growth potential is being held
back by low levels of investment and Further challenges remain in the
innovation as well as challenges in the healthcare system and long-term care, as
education system. Labour productivity in health outcomes have deteriorated. The
Poland has been expanding at one of the pandemic has taken a heavy toll, visible in the
fastest rates in the EU, benefiting from abrupt decline in life expectancy and high
Poland’s integration in global value chains, mortality relative to the EU average (see
technology transfer, and a relatively skilled Annex 16). Weaknesses persist in the
population (see Annex 12). The comparatively healthcare system amid a weak primary care
high birth and death rate of Polish firms system and high levels of unmet health and
suggests there are low obstacles to resource long-term care needs. This is underlined by
allocation ( 7). Nevertheless, labour productivity shortages of medical staff, as the share of
levels remain well below the EU average, with doctors and nurses in Poland is one of the
great variations between Poland’s regions (see lowest in the EU relative to population. Poland
Annex 17). The green and digital transitions is also one of the countries with the lowest
are being held back by a lack of digital skills use of digital health services in the EU. The
among workers in particular specialists in long-term care system is insufficient to meet
information and communications technology the needs of the ageing population due to low
(see Annexes 5 and 10), as well as by low availability of community-based care (see
rates of adult participation in learning (see Annex 14).
Annex 14). Low shares of graduates in STEM
subjects could limit the country’s research and To put the economy on a more
innovation potential (see Annex 11). The sustainable growth path, accelerating the
adoption of technology in businesses remains energy and green transitions will be key.
poor compared to the EU average, while SMEs The Polish energy mix is dominated by fossil
show meagre levels of innovation. The fuels and was, until early 2023, heavily reliant
education system continues to be challenged on Russian imports. To effectively decarbonise
by teacher shortages in some subjects and by its economy and improve energy security and
student overcrowding in big cities. This leads affordability at the pace required by the EU
to worse educational outcomes and deepens climate and energy targets, Poland should
inequalities. scale up the deployment of renewable energy
sources (RES). RES currently account for only
Weaknesses in the business environment around 11% of the country’s energy mix.
are holding back private investment.
Private investment as a share of GDP remains Poland is progressing moderately well on
below the EU average and the levels in peer some United Nations Sustainable
countries, stifled by the burdensome and Development Goals (SDGs), but its
unstable regulatory environment. performance remains below the EU
Administrative effectiveness and digital public average in SDGs focusing on climate
administration also rank below the EU average action, zero hunger, innovation,
sustainable cities, and gender equality.
(7) Business ‘churning’ is above the EU average (18.9% vs
16.1% in 2020) as is the share of high-growth Although the country is improving on certain
enterprises (9.8% vs 9.4%). SDG indicators related to environmental
4
Box 1: Box on the energy policy response in Poland
Poland has adopted measures to cushion the impact of energy price inflation. For 2023,
the gross budgetary costs for energy support measures are projected to amount to
1.7% of GDP. Most measures do not preserve the price signal and do not target the
most vulnerable. In general, the energy support measures are valid until the end of
2023.
In 2023, the government replaced the first set of measures, which consisted mainly in
reducing VAT rates on energy and granting universal cash subsidies to households
depending on their heating source, with adjusted price schemes for electricity and gas.
For electricity, a two-tier price scheme is in place, freezing the price of electricity at the
2022 level for households within limits based on average household consumption.
Above these limits, the price is capped at a higher level. The upper price cap is also
applicable to SMEs. For gas, prices are also frozen at 2022 levels for households and
vulnerable entities, without consumption limits. The gas-price scheme features a
targeted element: low-income households can claim a refund of the sum equivalent to
VAT for every paid bill. The scheme for electricity prices includes a mechanism to fund
the upper price cap based on taxing windfall profits. The government has introduced
levies limiting the revenues of energy producers and vendors in line with the Council
Regulation 2022/1854. The levies are collected by a dedicated fund (Fundusz Wypłaty
Różnicy Ceny) that compensates companies selling energy for the lost revenue due to
selling below the market price. Thus, the scheme is assumed to be deficit neutral.
Poland applies the EU solidarity contribution in application of Council Regulation (EU)

2022/1854 (8).
On the security of energy supply, Poland has decreased its dependency on fossil fuel
imports from Russia and implemented significant infrastructure projects to diversify
supply. This includes the ‘Baltic Pipe’ and the two gas interconnectors with Slovakia and
Lithuania. Poland has also taken several measures to promote energy efficiency,
including the ‘Clean Air Plus’ programme and energy savings.
sustainability, it is moving away from targets In addition to the support from the Recovery
on affordable clean energy (SDG 7), life below and Resilience Facility aimed at tackling many
water (SDG 14), and zero hunger (SDG 2). On of the key challenges it is facing (see Section
affordable clean energy, Poland has witnessed 2), Poland also benefits from a significant
an increase in per capita net greenhouse-gas volume of EU cohesion funds amounting to
emissions (SDG 13: climate action), despite EUR 88.3 billion over 2021-2027 (see Annex
having made progress in increasing the final 4).
share of renewable energy in gross final
energy consumption. Additionally, Poland is
improving on decent work and economic
growth (SDG 8) and industry, innovation and
infrastructure (SDG 9), although it is lagging
on quality education (SDG 4) when compared (8) A mandatory, temporary contribution with a rate of at
to its EU counterparts. Finally, expenditure on least 33% applied on the extraordinary and unexpected
law courts (SDG 16) has increased, but further profits of businesses active in the extraction of crude
measures to strengthen judicial independence petroleum, natural gas, coal, and refinery sectors. It is
calculated on taxable profits from the fiscal year
in the country are needed. starting in 2022 and/or in 2023, which are above a
20% increase of the average yearly taxable profits of
the business in 2018-2021.
5
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY
Poland’s recovery and resilience plan The RRP includes reforms to modernise
(RRP), approved in June 2022, addresses and simplify the management of public
many of the main challenges the country finances. These reforms include the
is facing. The RRP contains measures with an introduction of a new model of budget
overall value of EUR 35.4 billion structured management, the introduction of a new
around six key policy areas: the green medium-term budgetary framework, and the
transition; digitalisation; health; extension of the scope of the stabilising
competitiveness and innovation; sustainable expenditure rule to more general government
transport; and the quality of institutions. It is units.
estimated that the economic impact of the
NextGenerationEU fund in Poland could lead to The RRP contains several labour market
an increase in GDP of between 1.1% and 1.8% measures to increase the employment
by 2026 and translate into as many as rate, strengthen institutions, and address
105 000 additional jobs. Additional grant shortages of workers. These measures
resources available to Poland through the include: (i) increasing the availability of
REPowerEU chapter amount to childcare facilities; (ii) modernising public
EUR 2.76 billion. employment services; and (iii) addressing
segmentation in the jobs market by reducing
Due to its late adoption in June 2022, the disparities in social-security contributions
implementation of Poland’s recovery and between various types of work contracts.
resilience plan has been significantly
delayed. Strengthening the independence and Reforms to improve coordination in
impartiality of courts and remedying the several areas of education and training
situation of judges affected by the decisions are set to give workers skills that are
of the Disciplinary Chamber of the Supreme more in demand among employers and
Court in disciplinary cases and judicial increase participation in adult learning.
immunity cases are a precondition for the Additional measures are in the area of
Commission to disburse any payment to the research and innovation and include the
country and ensure the protection of the creation of a legal framework to accelerate
financial interests of the Union, allowing for a the processes of robotisation, digitalisation,
swift and steady implementation of the plan. and innovation in the industry. The RRP also
Poland has started to implement key includes changes in the internal governance of
measures in the RRP, among which reforms in research institutes aimed at improving
the areas of the fiscal framework, healthcare, cooperation between science and industry.
digital transition, energy efficiency and labour Poland’s decision to buy digital equipment for
market. Although Poland has not officially schools and adopt a strategic framework for
submitted addenda to the plan nor a digital-skills development will improve the
REPowerEU chapter, ongoing discussions with digital skills of students and adults.
the Commission are taking place. Additionally,
the country has announced its intention to Reforms in healthcare are expected to
take up additional loans. make the healthcare system more
effective and efficient and to improve
The following, more detailed review of accessibility and quality of health
measures being implemented under the RRP in
services, including by making greater use
no way implies formal Commission approval or
of digital solutions. Further measures aim
rejection of any payment requests.
to develop the skills of healthcare staff and
6
strengthen capacity in the training of medical foundation for the launch of significant
personnel. investments, for instance in energy-efficient
housing, the roll-out of broadband across
The green transition and the digital Poland, or sustainable water management. The
transformation of the economy are at the 37 milestones under the first instalment of the
core of the policy response in Poland’s plan worth EUR 4.22 billion are yet to be
RRP. About 43% of the total allocation of formally assessed. Key measures currently
Poland’s RRP is dedicated to green objectives. being implemented include:
The envisaged green reforms and investments
aim at: (i) increasing renewable energy • increasing access to high-quality childcare
production, (including onshore energy, for children up to the age of 3 under the
photovoltaics, offshore energy, smart grids, ‘Maluch+’ programme;
renewable hydrogen, and low-carbon
hydrogen); (ii) increasing energy efficiency; (iii) • amendments to the Act on Public Finances
improving air quality; and (iv) developing extending the scope of the stabilising-
sustainable transport. Implementation of these expenditure rule to increase the
measures is expected to help Poland achieve transparency and efficiency of public-
its 2030 climate and energy objectives. finance management;
About 21.3% of the total allocation of • changes to the law on higher education
Poland’s RRP is dedicated to digital and science strengthening cooperation
objectives. Measures include: (i) improving mechanisms between science and
connectivity; (ii) updating laws and the industry;
infrastructure of public administration
systems; (iii) introducing electronic structured • legislative changes to reduce
invoices; and (iv) significantly improving the administrative burden on businesses and
country’s cybersecurity systems. the public;
The RRP includes reforms to reduce • a new law to support the automation,
administrative and regulatory burden, digitalisation and innovation capacity of
improve the quality of law-making, and enterprises by introducing tax relief for
using more robots;
revise spatial-planning regulation. These
reforms include increasing the role of impact
• an amendment to the act on investments
assessments and involving stakeholders more
in onshore wind farms and regulatory
in the policy and law-making processes.
changes promoting electricity generation
Additional measures are set to strengthen the
in offshore wind farms to improve the
independence and impartiality of courts and
conditions for the development of
ensure an effective audit and monitoring of
renewable energy sources.
the RRP. In particular, these additional
measures include reforming the disciplinary
regime for judges and ensuring that judges
affected by decisions of the Disciplinary
Chamber of the Supreme Court have the right
to have their case reviewed.
Poland has started to implement key

aspects of the RRP (see Annex 3). The
implementation of reforms underway includes
reforms in the areas of the fiscal framework,
healthcare, the digital transition, energy
efficiency, childcare, the labour market, the
business environment including the judiciary,
science, and industry. They also lay the
7
Box 1: Key deliverables under the RRP in 2023-2024
• Poland committed to reform the disciplinary regime for judges and to set up a
review process before an independent court for judges affected by decisions of the
Disciplinary Chamber of the Supreme Court.
• Entry into force of an amendment to the Investment Zone Act, to create a new
model for granting financial support to businesses undertaking activities in special
economic zones.
• Adoption of a new law on spatial planning, which will introduce a requirement for
all municipalities to draw up and adopt a long-term strategy for land development in
the municipality.
• Limiting segmentation in the jobs market, by ensuring that all civil-law
employment contracts are subject to social-security contributions.
• Strategic review of long-term care to identify reform priorities to improve
efficiency and quality.
• Reform to improve the conditions for developing hydrogen technologies and

other decarbonised gases. This is to be achieved by: (i) the entry into force of a law
laying down rules for hydrogen; and (ii) the issuance of environmental permits for
hydrogen refuelling stations.
• Reform to improve the conditions for developing renewable energy sources. An
amendment to the Renewable Energy Act is expected to introduce better conditions for
the operation of energy clusters and the implementation of collective models of energy
‘prosumers’ ( 9).
• Publication of a framework to co-finance broadband projects ensuring
universal access to high-speed internet. This is part of a broader reform aiming at
guaranteeing universal access to high-speed internet and digital services throughout
Poland.
• Signature of contracts following open and competitive tenders to electrify
478 km of railway lines and upgrade them to TEN-T standards ( 10).
• Entry into force of a legislative act safeguarding the system for monitoring
and checking the supply of medicines. The objective of the reform is to introduce a
regulatory framework facilitating the production of medicines in Poland and attracting
investment in new facilities to produce medicines in the country.
(9) Prosumers are businesses and households that both

produce their own electricity (for example from rooftop
solar panels) and consume electricity. Prosumers can
sell excess electricity that they produce – but do not
need – to the electric grid, and then consume electricity
from the grid when their solar panels are not producing
enough electricity for their immediate needs.
(10) Trans-European Transport Network (TEN-T) is a network
of roads, railways, waterways, and airports that connect
EU member states and other European countries. TEN-T
was established by the European Commission to
promote the development of a sustainable and efficient
transport system that enhances economic growth, job
creation, and the well-being of citizens.
8
FURTHER PRIORITIES AHEAD
Beyond those tackled by the RRP, Poland would increase ( 11). Women would be more
faces additional challenges not fully affected by this due to their shorter
covered in the plan. The rapidly ageing contributory periods and lower overall
population is putting the pension system under pensionable earnings. To broadly maintain the
pressure. The efficiency of public spending on current level of pension adequacy without
social policies and investment remains a lengthening working lives, the government
challenge amid weaknesses in the would have to increase public spending on
transparency of public finance. Further steps pensions by 6.7% of GDP in 2070 ( 12). Benefits
are needed to address skills mismatches and from voluntary saving schemes ( 13) under the
shortcomings in the education system. so-called third pension pillar would likely be
Additional measures are also required to insufficient to compensate for the loss of old-
reduce reliance on fossil fuels and accelerate age income given the low contributions made
the green transition. Moreover, enhancing the to these voluntary saving schemes, although
investment climate would boost private some solutions like the auto-enrolment
investment. Addressing these challenges mechanism in the Employee Capital Plans
would also help Poland to make further (PPK) mitigate this risk.
progress in achieving the Sustainable
Development Goals (SDGs) where it currently Recent changes in the general and special
shows some room for improvement, in pension systems have made pension pay-
particular on the SDGs for affordable clean outs more generous to current pensioners
energy (SDG 7) and quality education (SDG 4) but they come at a price.
(see Annex 1). Recently introduced 13th and 14th pension
benefits ( 14) increased annual old-age pension
spending by close to 10% ( 15). Benefits from
the farmers’ special pension system were also
Ensuring efficient, sustainable, and expanded in recent years and include: (i) the
transparent public finances as the 13th and 14th pension payment; (ii) the right
population ages
(11) Future benefits from the public pension system for new
retirees will drop significantly in relative terms: from
The rapidly ageing population is putting 54% of final salary in 2019 to about 25% in 2060.
the pension system under pressure. (12) Commission calculations based on The 2021 Ageing
Poland is one of the fastest-ageing countries Report: Economic and Budgetary Projections for the EU
Member States (2019-2070), Institutional Paper 148,
in the EU. Within four decades, the share of
2021, Brussels.
people above the age of 80 is expected to
nearly triple, from 4% of the population in (13) Savings schemes include: PPE – pracownicze programy
emerytalne; IKE – indywidualne konto emerytalne; IKZE
2019 to 12% in 2060, with a sharp increase – indywidualne konto zabezpieczenia emerytalnego;
occurring from 2040. However, the existing and PPK – pracownicze plany kapitałowe.
pension system assumes a retirement age (14) Since 2019, the 13th month pension payment (i.e. an
that doesn’t increase even as average life extra payment made in addition to the standard
expectancy and years spent in retirement monthly pension payment) has been paid to all
continue to rise. This implies that benefits pensioners at the level of the minimum pension. Since
2021, a 14th month pension has also been paid at the
from the public pension system will decline level of the minimum pension, with higher-income
rapidly in relative terms and old-age poverty pensioners receiving a reduced amount.
(15) OECD (2021), Pensions at a Glance 2021: OECD and
G20 Indicators, OECD Publishing, Paris.
9
to continue to work while drawing the benefit performance include the coordination between
(since June 2022); and (iii) a supplement to entities, budget comprehensiveness and unity,
match the general old-age minimum maintenance funding, project selection, and
pension ( 16). These changes reduce incentives portfolio oversight and management. The
for workers to work longer than the relatively process of spending reviews that could support
low retirement age as well as to switch from spending efficiency is being re-evaluated.
the farmers’ special pension system (KRUS) to
the general pension system (ZUS). One of the Independent fiscal oversight remains
changes introduced by the 2022 reform of the scattered, reducing transparency in the
income-tax system under the ‘Polish Deal’ budgetary framework. Poland does not have
included reduction of the tax burden on a fully-fledged independent fiscal institution
workers delaying retirement beyond the and activities related to the monitoring of
statutory age to prolong working lives (see fiscal rules are scattered among several
Annex 19). bodies, with the Supreme Audit Office (NIK)
taking a central role. Compliance with fiscal
Tax compliance has improved, but rules can currently be assessed by three public
considerable scope exists to boost the institutions, each of which use different
efficiency of public spending on social methodologies with conflicting conclusions
benefits and public investment. The VAT and communications, as was the case in the
compliance gap fell to 11.3% in 2020 but assessment of the 2021 budget act ( 20). The
remains above the level observed in most mandate of the NIK does not cover
other EU countries, suggesting scope for macroeconomic or budgetary forecasting, and
further improvements ( 17) (see Annex 19). no independent institution is tasked with an
Social benefits remain largely untargeted and assessment of the long-term sustainability of
without means-testing at household level, in public finances or with providing costing
particular for costly child benefits (the ‘Family estimates to the parliament. Weaknesses
500+’ programme). This has resulted in a persist in the medium-term budgetary
welfare system with limited redistributive framework (see Graph 3.1).
power. Much of public spending is captured by
high-income households, as the richest 20%
of Poles receive the same share of public cash
transfers as the poorest 20% ( 18). In 2022,
new – mostly universal – support measures
were introduced to offset rising energy and
living costs. However, these measures did not
sufficiently encourage reduction in energy
demand (see Annex 7). Furthermore, about one
third of public investment spending in Poland
did not result in an increase in the level or
quality of infrastructure that would have been
achieved by the most efficient countries with
comparable levels of public capital stock per
capita ( 19). Areas with relatively weak
(16) For more details on the changes see

https://www.krus.gov.pl/.
(20) Poland’s Ministry of Finance publishes an annual report
(17) European Commission (2022) ‘VAT gap in the EU: report on budget execution, which also covers fiscal rules. The
2022’, Publications Office of the European Union. Monetary Policy Council submits to the parliament an ex
(18) OECD (2023), OECD Economic Surveys: Poland 2023, ante assessment of the draft budget covering
OECD Publishing, Paris. macroeconomic forecasts and, in the past, compliance
with the stabilisation-expenditure rule. The NIK submits
(19) IMF (2022) Republic of Poland: Technical Assistance to the parliament a report on the execution of the
Report-Public Investment Management Assessment, Budget Act, including compliance with national fiscal
Country Report No. 2022/321. rules.
10
Graph 3.1: Medium-term budgetary framework Challenges remain to an efficient public
index procurement process. The 2021 reform
improved openness and transparency in the
5. Level of detail
public procurement systems. In 2022,
approximately half of public tenders had only
4. Involvement of IFI one bidder participating (see Annex 12), which
was the highest percentage among all EU
3. Involvement of parliament
countries. The World Bank estimates that
2. Link annual budget & medium- potential savings amount to 5% of
term fiscal plans
procurement costs per year if Poland used a
1. Coverage of targets/ceilings more cost-effective procurement strategy
without necessarily altering the existing
- 0.5 1.0 1.5 2.0 2.5 3.0
regulatory framework ( 23).
PL EU average
Poland scores 0 on the ‘link between budget & medium-

term fiscal plans’ and ‘involvement of independent fiscal
institutions’. Remaining weaknesses in
Source: Commission Fiscal Governance Database, 2021 education and healthcare
values
The pandemic has exacerbated existing

The practice of channelling new spending challenges related to the quality and
via extra-budgetary funds leads to an inclusiveness of education, and initial
accumulation of debt outside the evidence shows that students’ basic skills
coverage of regular budgetary practices deteriorated over this period. Teacher
and rules. Public debt outside the perimeter shortages have become more acute and more
of the national debt brake is set to increase widespread in 2023. Problems with recruiting
from 11% of GDP in 2022 to 14% of GDP in and retaining teachers persist, mainly due to
2024 according to the government’s own low salaries, the poor image of the teaching
projections ( 21). This is mainly on account of profession, and deteriorating working
rising debt of off-budget funds managed by conditions ( 24). Despite a wide range of
the Polish development bank (BGK), with the training opportunities to become a qualified
scope of activities supported by BGK funds teacher, the proportion of teachers below the
constantly broadening. Bonds issued by the age 30 ranges from less than 5% to 6%,
BGK likely have a higher premium and yields compared to around 40% of teachers aged 50
compared to state treasury issued bonds or older. Trainee teachers account for only
leading to overall higher public borrowing 2.8% of all employed schoolteachers ( 25). Due
costs other things being equal. The diminished to multiple changes in the schooling system,
role of the Budget Act in recent years reduces schools and classes are overcrowded,
transparency and undermines the role of the especially in larger cities. The focus on key
parliament in public finances ( 22). The 2023 competences is limited in both the new core
Convergence Programme includes plans to curricula and in the new upper-secondary
integrate some of the extra-budgetary funds school leaving exam. Because the central
in the budget, in particular the COVID-19 Fund, subsidy for education is increasing more
and a gradual reduction in borrowing by off- slowly than expenditure, local governments
budget funds to finance public spending. have had to reduce investments in educational
infrastructure and extra-curricular activities for
(23) World Bank (2022) Poland Public Finance Review.

(21) Ministry of Finance (2022) The Public Finance Sector Washington, D.C., World Bank Group.
Debt Management Strategy in the years 2023-2026,
Warsaw. (24) WUP Krakow (2023). Barometer of professions.
(22) NIK (2022) Analysis of execution of the state budget (25) Statistics Poland (2022) Education in the 2021/2022
and monetary-policy assumptions in 2021, Warsaw. school year.
11
children. These reductions affect children from some areas require further action. This is
disadvantaged socio-economic especially the case for preventive health
backgrounds ( 26). Against this backdrop, Poland services, primary care and psychiatric care.
is aiming to make education more inclusive Health-promotion and sickness-prevention
with the help of EU funds. Efforts to improve programmes have been underdeveloped,
the quality of higher education continue to despite high rates of reported preventable
face challenges, as the results of the first mortality, and the share of spending on
evaluation of higher education institutions preventive care fell in 2019. Because the
under the new rules are questioned. number of psychiatrists relative to the
population is the lowest in the EU, psychiatric
Labour shortages in key sectors healthcare in Poland does not provide
necessary for the green transition have comprehensive and accessible care, especially
increased in recent years. In 2022, labour for children and adolescents and those living
shortages were reported in Poland for 33 in smaller towns and rural areas ( 30).
occupations that required specific skills or Additionally, the prevalent hospital-based
knowledge for the green transition. These model of mental healthcare is not efficient.
occupations included plumbers, pipe fitters, The Ministry of Health has initiated reforms
roofers, building electricians, and related that are based on providing more care in
specialist electricians ( 27). In 2022, labour community-based settings.
shortages were reported as a factor
constraining production in industry (for 63.4%
of firms) and construction (for 74.6% of
firms) ( 28). The job-vacancy rate has increased
Reducing reliance on fossil fuels
across key sectors such as construction (from and accelerating the green
1.0% in 2015 to 2.5% in 2021) and transition
manufacturing (from 0.6% in 2015 to 1.1% in
2021), although both sectors still stand below
the EU average for vacancies in these sectors The Polish energy mix remains heavily
in 2021 of 3.6% and 1.9%, respectively ( 29). dominated by fossil fuels. Approximately
Upskilling and reskilling for the green 90% of Poland’s energy mix in 2021 was
transition and promoting inclusive labour derived from fossil fuels. Coal alone accounts
markets are essential policy levers to for around 60% of the energy mix and 72% of
accelerate the transition to net-zero and total electricity generation. Renewable energy
ensure its fairness (see Annex 8). sources (RES), which continue to be
substantially less subsidised than fossil fuels,
Despite the comprehensive reform of the only accounted for around 13% of the energy
healthcare system planned in the RRP, mix and only 18% of total electricity
generation (see Annex 6). Poland allocates
(26) NIK (2022), Financing education by local governments. more than the EU average to fossil-fuel
subsidies, especially for coal and oil. The
(27) Data on shortages are based on European Labour
Authority (2023), EURES Report on labour shortages and mining of hard coal is expected to phase out
surpluses 2022. National authorities report through a gradually and only by 2049 ( 31). While energy
questionnaire, based on administrative data and other prices have decreased, uncertainty remains
sources as submitted by the EURES National regarding next winter, which requires
Coordination Offices (definitions of shortages differ, so
data are not comparable across countries and cover a continued efforts to structurally reduce gas
wide variety of sectors). Skills and knowledge demand.
requirements are based on the ESCO (European Skills
Competences and Occupations) taxonomy of skills for
the green transition (for occupations at ISCO 4-digit
level of which there are 436 in total). Examples are
identified based on their ESCO ‘greenness’ score and
relevant sectors. (30) Maps of health needs – System and Implementation
Analysis Database, Ministry of Health Poland.
(28) European Business and Consumer Survey.
(31) International Energy Agency. Poland 2022 – Energy
(29) Eurostat (JVS_A_RATE_R2). Policy Review.
12
Poland has undertaken a number of steps but only designates 50% of these revenues –
to reduce its dependence on Russian the minimum percentage required by the ETS
imports of fossil fuels. In 2021, Russia Directive – to climate and energy-related
accounted for 53% of the value of Polish fuel initiatives. Achieving carbon neutrality by 2050
imports ( 32). Poland has recently completed a will require a shift towards energy efficiency, a
number of gas-infrastructure investments diffuse electrification of the economy, a
funded from national and EU cohesion-policy significant deployment of RES and scaling up
funds, which made it possible for the country the manufacturing of clean technologies ( 34).
to substantially diversify its natural-gas supply
and increase energy security starting in the Despite a number of measures in place to
second half of 2022 (see Annex 7). Beyond contain energy demand, further efforts
this, the reduction of Poland’s reliance on are needed to improve energy efficiency,
fossil fuels is an essential part of ensuring especially for residential buildings and
security of supply. district heating systems. Final energy
consumption in Poland was 75,2 Mtoe in 2021,
Current measures to decarbonise the and it has mostly been on the rise throughout
economy are not well aligned with the the last decade (see Annex 6). Currently, more
EU’s 2030 climate and energy targets. than half of the energy demand of residential
Poland has been decarbonising at a buildings for heating is satisfied by coal, either
substantially slower rate than other EU through direct use or indirectly in district
Member States. Compared with 2005, Polish heating. However, residential buildings remain
greenhouse-gas emissions fell by only 1% in largely energy inefficient, contributing to
2021 against an EU average reduction of higher investment needs compared to other
24% (33). Emissions from the energy sector EU countries. Additionally, the district-heating
remain high, as do the impacts of the carbon sector requires targeted reforms and stepped-
price on the economy. Poland is also behind in up investments to accelerate its
reducing emissions in the non-ETS sectors, decarbonisation and to ensure its long-term
including buildings and transport (see Annex financial viability. On the positive side, because
6). The government’s 2019 National Energy of the rise in energy prices, heat-pump sales
and Climate Plan (NECP) prescribes that the have increased substantially in recent months,
share of RES in the energy mix to increase to making Poland one of the EU’s fastest growing
between 21% and 23% of gross final energy markets for heat pumps. The RRP and the
consumption by 2030. This RES target is not 2021-2027 cohesion-policy programmes
sufficiently ambitious in light of the 32% include a broad range of measures to improve
overall EU renewable energy target set for energy efficiency in: (i) selected economic
2030 in 2018. Although an update of the sectors; (ii) private and public buildings; and
NECP is expected in 2023, the lack of an up- (iii) district heating systems. However, further
to-date energy policy is holding back efforts are needed to adequately address
decarbonisation efforts while the absence of a these challenges.
long-term strategy for climate neutrality
hinders long-term planning. This is further Increasing energy generation from
exacerbated by the fact that, as laid out in its renewable energy sources is key to
national strategy ‘Energy Policy of Poland until decarbonising the Polish economy and to
2040’, Poland plans a considerable expansion achieving climate neutrality. Although RES
of gas-fired generation capacity and intends to account for a small share of the energy mix,
considerably increase its natural gas national and EU support for photovoltaic (PV)
consumption. Poland is one of the top installations has resulted in Poland becoming
revenue-generating members of the EU ETS, one of the fastest growing PV markets in the
EU, with installed capacity reaching 11 GW. In
(32) E. (2022, November 15). ‘Poland on the way to
2022, Poland installed 4.9 GW of solar
independence from Russian fuels’ | Obserwator capacity, equivalent to 12% of the EU’s total
Finansowy: Ekonomia, Debata, Polska, Świat.
(33) EU Climate Action Progress Report, 2022. (34) Net Zero Industry Act. COM(2023) 161.
13
newly installed capacity that year. The 2020 air pollution and traffic congestion. Between
Offshore Wind Act outlines the framework for 2008 and 2018, regional and suburban bus
the development of offshore wind farms. On lines were reduced, resulting in approximately
onshore wind energy, Poland has introduced a 65% of the rural population now being unable
law to amend the minimum distance between to access public transportation. Against this
onshore wind installations and residential backdrop, although the RRP includes measures
buildings to 700 metres. Although the recent to promote sustainable mobility via public
revision boosts investment in onshore wind urban transport, clean vehicles, and
capacity, the 700-metre-distance rule reduces investments in railways, a strategic framework
the surface area available to build installations to decarbonise the transport sector is needed.
compared with the initially envisaged 500-
metre limit (see Annex 7). Accelerated
investment in renewable hydrogen generation
could enable the country to fast-track Strengthening the business
decarbonisation in the transport and industry environment and investment
sectors. Finally, further investment in
biomethane could increase the security of
energy supply and decrease dependence on Low levels of investment could limit
fossil fuels. future productivity gains and economic
growth in Poland. Private investment as a
To unleash the potential of renewable percentage of GDP in 2022 was low at 19.1%,
energy sources, Poland needs to: (i) well below the EU-wide average (25.8%) and
improve its internal networks for energy that of regional peers such as Czechia (29.1%)
transmission and distribution; and (ii) and Hungary (35.0%). Investment is
reform its regulatory environment. In particularly weak in the most productive
particular, Poland should implement measures sectors, such as information and
to remove barriers to RES permitting: (i) communications technology, where rapid
accelerating the inclusion of RES in spatial technological progress requires high
plans; (ii) setting up renewables go-to areas; investment outlays (see Annex 12). The share
(iii) amending rules on grid-connection permits; of buildings and infrastructure investment in
and (iv) reforms and investments to modernise total investment was 51.5%, while intangible
obsolete and inefficient distribution networks. assets (e.g. R&D investment and intellectual
Poland still has a long way to go to dismantle property) accounted for just 9.7%, limiting the
regulatory and administrative barriers to ability of the economy to move up the value
accelerate the deployment of RES. Further chain. The country is also performing below
reforms are needed to: (i) enable industry to the EU average on innovation indicators (see
benefit from clean energy through Annex 11). Overall, increasing capital
arrangements such as power purchase investments in high-productivity sectors will be
agreements (PPAs); (ii) remove restrictions on crucial to sustaining Poland’s strong economic
energy communities; and (iii) promote the performance and facilitating the shift towards
deployment of renewables in the district a greener growth model.
heating sector.
Social dialogue is poor. No impactful
Decarbonising the transport sector will measures have been implemented in 2022 to
be essential to reducing greenhouse-gas strengthen consultations with – and the
emissions. In the absence of coordinated involvement of – social partners in the
decarbonisation measures, emissions from legislative process and improve the overall
transport in Poland have continued to rise, and quality of social dialogue (see Annex 14). The
even tripled between 1990-2019. Moreover, collective bargaining coverage remains limited.
90% of these emissions stem from road
Serious concerns related to the rule of
transport. Public urban transport and rail
transport are still not attractive alternatives law continue to impair the investment
compared with private cars, thus exacerbating climate in Poland. The perception of judicial
independence among the general public and
14
companies is very low (see Annex 12). The number of other areas. These included
Commission’s 2022 Rule of Law Report ( 35) shortcomings in the independence of the
highlights persistent concerns that affect the prosecution service and in the functioning of
independence of the judiciary. Since July 2021, the Supreme Audit Office, both of which affect
the Court of Justice of the EU and the the effectiveness of the fight against
European Court of Human Rights have corruption.
delivered several rulings on the issues
identified by the Commission. Poland refused
to comply with interim measures orders of the
European Court of Human Rights and has so
far failed to fully comply with an interim
measures order of the Court of Justice of the
EU of 14 July 2021 pertaining to the
disciplinary regime for judges. In view of
notable progress in the implementation of the
aforementioned interim measures order, in
April 2023, the Court of Justice of the
European Union reduced the daily financial
penalty imposed on Poland from 1 million EUR
to 0.5 million EUR ( 36). In its RRP, Poland
committed to reforming the disciplinary
regime for judges and to setting up a review
process before an independent court for
judges affected by decisions of the
Disciplinary Chamber of the Supreme Court. To
this end, Poland adopted a law, which entered
into force on 15 July 2022. On
13 January 2023, the Polish Parliament
adopted another law to further address the
commitments in its RRP. The President of the
Republic referred this law to the Constitutional
Tribunal. Therefore, it has not yet entered into
force. At the time of Poland’s first payment
request, the Commission will carefully assess
the satisfactory fulfilment of the milestones
committed to by Poland. Poland has not
addressed the serious concerns related to the
National Council for the Judiciary following the
reform of the country’s justice system in 2017.
Furthermore, on 15 February 2023, the
Commission decided to refer Poland to the
Court of Justice of the EU for violations of EU
law by the Polish Constitutional Tribunal and
its case law, which, according to the
Commission, challenged notably the primacy
of EU law ( 37). The Commission’s 2022 Rule of
Law Report also highlighted concerns in a
(35) EUR-Lex - 52022SC0521 - EN - EUR-Lex (europa.eu).

(36) https://curia.europa.eu/jcms/upload/docs/application/pdf/
2023-04/cp230065en.pdf
(37) https://ec.europa.eu/commission/presscorner/detail/en/ip
_23_842.
15
KEY FINDINGS
Poland’s RRP includes measures to steady implementation of its recovery and

address a series of structural challenges resilience plan.
through:
Beyond the reforms and investments in
• improving the efficiency of public spending the RRP and in the 2021-2027 cohesion-
and making the public finances more policy programmes, Poland would benefit
transparent; from:
• addressing disparities in labour market • taking measures to improve the

participation such as the gender sustainability of the pension system, and
employment gap; ensuring more Poles are strengthening independent fiscal oversight;
covered by social-protection systems;
strengthening public employment services; • improving the efficiency of spending on
and fostering quality education and social benefits and public investment, as
demand-driven skills; well as continuing to improve public
procurement;
• improving the resilience, accessibility, and
effectiveness of the health system, • taking further steps to tackle skills
including through increased access to e- mismatches and addressing challenges
health services; related to the quality and inclusiveness of
education and training;
• strengthening collaboration between
researchers and businesses to improve • stepping up efforts to reduce its reliance
innovation; on fossil fuels and improving energy
efficiency, in particular of the building
• improving the further digitalisation of stock; increasing energy generation from
schools, businesses, and public renewable energy sources, including by
administration, including through the streamlining permitting procedures;
development of appropriate infrastructure; improving the energy distribution
networks, increasing transparency of grid
• significantly accelerating investments in connection procedures and planning;
decarbonisation, energy transformation, promoting sustainable public transport
and sustainable transport; modes; enhancing investments in green
skills and key energy transition
• improving the investment climate, in technologies;
particular by raising the standard of
certain aspects of judicial protection; • further enhancing the investment climate,
including by safeguarding judicial
• ensuring effective public consultations and independence; and improving the social
the involvement of social partners in the dialogue.
policy-making process;
Poland should urgently fulfil the required

milestones and targets related to the
protection of the financial interests of the
Union with a view to allow for a swift and
16
ANNEXES
LIST OF ANNEXES
Cross-cutting indicators 22
A1. Sustainable Development Goals 22
A2. Progress in the implementation of country-specific recommendations 25
A3. Recovery and resilience plan - overview 28
A4. Other EU instruments for recovery and growth 29
A5. Resilience 32
Environmental sustainability 33
A6. European Green Deal 33
A7. Energy security and affordability 38
A8. Fair transition to climate neutrality 44
Productivity 47
A9. Resource productivity, efficiency and circularity 47
A10. Digital transformation 49
A11. Innovation 51
A12. Industry and single market 53
A13. Public administration 57
Fairness 59
A14. Employment, skills and social policy challenges in light of the European Pillar of Social Rights 59
A15. Education and training 62
A16. Health and health systems 65
A17. Economic and social performance at regional level 67
Macroeconomic stability 70
A18. Key financial sector developments 70
A19. Taxation 72
A20. Table with economic and financial indicators 74
A21. Debt sustainability analysis 75
LIST OF TABLES
A2.1. Summary table on 2019-2022 CSRs 25
A3.1. Key elements of Poland's RRP 27
19
A5.1. Resilience indices summarising the situation across RDB dimensions and areas 31
A6.1. Indicators tracking progress on the European Green Deal from a macroeconomic perspective 32
A7.1. Key energy indicators 37
A8.1. Key indicators for a fair transition in Poland 43
A9.1. Overall and systemic indicators on circularity 47
A10.1. Key Digital Decade targets monitored by DESI indicators 49
A11.1. Key innovation indicators 50
A12.1. Industry and Single Market 54
A13.1. Public administration indicators 56
A14.1. Social Scoreboard for Poland 58
A14.2. Situation of Poland on 2030 employment, skills and poverty reduction targets 59
A16.1. Key health indicators 64
A17.1. Selected indicators at regional level - Poland 67
A18.1. Financial soundness indicators 69
A19.1. Taxation indicators 71
A20.1. Key economic and financial indicators 73
A21.1. Debt sustainability analysis - Poland 75
A21.2. Heat map of fiscal sustainability risks - Poland 76
LIST OF GRAPHS
A1.1. Progress towards the SDGs in Poland in the last 5 years 23
A2.1. Poland’s progress on the 2019-2022 CSRs (2023 European Semester) 24
A3.1. Share of RRF funds contribution to each policy pillar 27
A4.1. Cohesion policy funds 2021-2027 in Poland: budget by fund 28
A4.2. Synergies between cohesion policy funds and RRF six pillars in Poland 28
A4.3. Cohesion policy funds contribution to the SDGs in 2014-2020 and 2021-2027 in Poland 29
A6.1. Thematic – greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2021 32
A6.2. Energy mix (top) and electricity mix (bottom), 2021 33
A6.3. Thematic – environmental investment needs and current investment, p.a. 2014-2020 34
A7.1. Underground gas storage levels in Poland 37
A7.2. Share of gas consumption per sector, 2021 38
A7.3. Share of gas consumption per industrial sector, 2021 (% of industry total gas consumption) 38
A7.4. Poland´s retail energy prices for industry (top) and households (bottom) 39
A7.5. Public (top) and Private (bottom) R&I investment in Energy Union R&I priorities 41
A8.1. Fair transition challenges in Poland 43
A8.2. Distributional impacts of energy prices due to rising energy expenditure (2021-2023) in Poland 44
A9.1. Trend in material use 46
A9.2. Treatment of municipal waste 47
A11.1. R&D intensity in Poland over time 50
A12.1. Investment, % GDP 52
A12.2. Nominal labour productivity per hour worked (EU=100) 53
A12.3. Business environment and productivity drivers 54
A13.1. Poland. E-government maturity and e-government users 56
A13.2. Poland. a) Regulatory impact assessment, b) Stakeholder engagement and c) Ex post evaluation of legislation 57
A15.1. Age profile of teachers in Poland 61
A16.1. Life expectancy at birth, years 64
A16.2. Projected increase in public expenditure on healthcare over 2019-2070 64
A17.1. GDP (PPS) per capita (2010) and GDP growth (2010-2020) in Poland 66
A18.1. Credit growth 69
A19.1. Tax revenues from different tax types, % of total taxation 72
A19.2. Tax wedge for single and second earners, % of total labour costs, 2022 72
LIST OF MAPS
A17.1. Poland GDP per capita (PPS) by NUTS 2 region, 2020 66
20
CROSS-CUTTING INDICATORS
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS
This Annex assesses Poland’s progress on the Poland has made some progress on energy
Sustainable Development Goals (SDGs) along consumption indicators including the share of
the four dimensions of competitive renewable energy in gross final energy
sustainability. The 17 SDGs and their related consumption (SDG 7; from 11.4% in 2016 to
indicators provide a policy framework under the 15.6% in 2021; EU average 21.8%). However, it is
UN’s 2030 Agenda for Sustainable Development. moving away from the EU average on per capita
The aim is to end all forms of poverty, fight net greenhouse gas (GHG) emissions (SDG 13;
inequalities and tackle climate change and the 10.1 tonnes in 2021 compared to 9.6 tonnes in
environmental crisis, while ensuring that no one is 2016; EU average of 7.4 tonnes in 2021).
left behind. The EU and its Member States are Moreover, Poland is rapidly losing carbon sinks,
committed to this historic global framework with the net GHG emissions from land use and
agreement and to playing an active role in forestry (LULUCF) increasing from -122.7 tonnes
maximising progress on the SDGs. The graph CO2 eq. per km² in 2016 to -67.9 in 2021,
below is based on the EU SDG indicator set compared to the EU average of -50.1). Moreover,
developed to monitor progress on the SDGs in an Poland’s energy import dependency has increased
EU context. (from 19.8% in 2015 to 42.8% in 2020; EU
average 57.5%). As for affordable energy (SDG 7),
While Poland is improving on some of the the percentage of the Polish population unable to
SDG indicators related to environmental keep their homes adequately warm was lower
sustainability, it is moving away from SDG 7 (3.2% in 2021) than the EU average (6.9%).
Poland’s recovery and resilience plan (RRP)
(Affordable and clean energy), SDG 14 (Life
includes measures to address some of the energy-
below water) and SDG 15 (Life on land).
Graph A1.1: Progress towards the SDGs in Poland in the last 5 years
For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for
details on extensive country-specific data on the short-term progress of Member States: Key findings - Sustainable development
indicators - Eurostat (europa.eu). The status of each SDG in a country is the aggregation of all the indicators for the specific goal
compared to the EU average. A high status does not mean that a country is close to reaching a specific SDG, but signals that it is
doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country.
Source: Eurostat, latest update of early April 2023, except for the EU Labour Force Survey (LFS) indicators released on 27 April
2023. Data mainly refer to 2016-2021 or 2017-2022.
21
related challenges, namely on the energy Poland is improving on some SDGs on
renovation of buildings, energy efficiency of productivity (SDGs 8 and 9), but it is moving
business and the decarbonisation of energy away from the EU average on SDG 4 (Quality
production. On SDG 14, Poland is not progressing, education). Poland performs well on its
as shown, in particular, by its low and decreasing employment rate (SDG 8; 76.7% in 2022
share of coastal water bathing sites with excellent compared to 70.0% in 2016 and the EU average
water quality (44.8% in 2021; EU average 78.2%). of 74.6% in 2022). On the negative side, Poland is
While Poland is improving on several SDG moving away from the EU average on the indicator
indicators related to SDG 11 (Sustainable cities for the investment share of GDP (SDG 8; 17% in
and communities), its share of buses and trains in 2021 compared to 18.5% in 2016 and the EU
total passenger transport has decreased (from average of 22.4% in 2021). Therefore, the Polish
21.3% in 2015 to 12.4% in 2020; EU average RRP includes several measures aimed at improving
12.8%) and the country needs to reduce the investment climate. Poland is improving but
premature deaths due to exposure to fine still performs far below the EU average on
particulate matter (PM2.5) (96 in 2020; EU indicators related to R&D and innovation, and
average 54). sustainable industry (SDG 9), including gross
domestic expenditure on R&D (1.44% of GDP in
While Poland is improving on most SDG 2021, compared to the EU average of 2.27%) and
indicators related to fairness (SDGs 1, 3, 5, 8 air emissions intensity of fine particulate matter
and 10), it still needs to catch up on SDG 2 (PM2.5) from industry (0.28 g per euro in 2020,
(zero hunger) and is moving away from SDG compared to the EU average of 0.07 g). On the
4 (quality education). Poland performs well on share of households with a high-speed internet
the indicators for people at risk of poverty or connection, Poland has made considerable
social exclusion (SDG 1; 16.8% in 2021 compared progress and is close to achieving the EU average
to 20.6% in 2016 and the EU average of 21.7% in of 70.2% in 2021. However, the share of adults
2021) and for income distribution (SDG 10; 4.0 in with at least basic digital skills (SDG 4) remains
2021 compared to 4.8 in 2016 and the EU low (42.9% in 2021, compared to the EU average
average of 5.0 in 2021). In addition, Poland has of 53.9%).
improved on several fairness-related indicators
such as the long-term unemployment rate (SDG 8; Poland is improving on SDG indicators
0.9% in 2022 compared to 1.5% in 2017 and the related to macroeconomic stability (SDGs 8
EU average of 2.4%). However, Poland needs to and 16), but still needs to catch up compared
reduce avoidable mortality (SDG 3; 418.9 deaths to the EU. It has improved on SDG 8 (Decent work
per 100 000 persons in 2020, compared to the EU and economic growth), although real GDP per
average of 271.7) and improve on the indicator on capita (EUR 14 600 in 2022) remains below the
people outside the labour force due to caring EU average of EUR 28 820. As regards justice and
responsibilities (SDG 5; 1.1 pps in 2022, compared strong institutions (SDG 16), Poland has increased
to the EU average of 1.2 pps). Moreover, the its general government total expenditure on law
country is moving away from SDG 4 on several courts (SDG 16) (EUR 78.1 per capita) but needs to
indicators related to quality education, including catch up with the EU average of EUR 100.7.
tertiary educational attainment (40.5% in 2022 However, perceptions of the independence of the
compared to 43.6% in 2017; EU average: 42% in justice system have become more negative, with
2022) although it seems to have reversed the the percentage of people who consider the
negative trend on early leavers from education judiciary to be fairly good and very good declining
and training (4.8% in 2022, compared to 5.0% in steeply from 50% in 2017 to 24% in 2022 (the EU
2017 and the EU average of 9.6% in 2022) and average is 53%). Poland’s Corruption Perceptions
still performs better than the EU average on both Index has also deteriorated (from 60 in 2017 to
indicators. Poland is also moving away from the 55 in 2022, compared to the EU average of 64).
EU average on several indicators related to food On the positive side, Poland performs well on the
and farming (SDG 2), including the indicator ‘population with confidence in the European
regarding the area under organic farming (3.5% in Parliament’ index’ (55% of the population in 2022,
2020 compared to 4% in 2015 and the EU compared to 43 in 2017 and the EU average of 50
average of 9.1% in 2020). in 2022). The Polish RRP includes measures
related to the independence of the justice system.
22
As the SDGs form an overarching framework, any
links to relevant SDGs are either explained or
depicted with icons in the other Annexes.
23
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC
RECOMMENDATIONS
The Commission has assessed the 2019-2022 Graph A2.1: Poland’s progress on the 2019-2022
country-specific recommendations (CSRs) (38) CSRs (2023 European Semester)
addressed to Poland as part of the European
Full
Semester. These recommendations concern a Substantial
Progress
Implementation
4% No Progress
wide range of policy areas that are related to 15 4% 17%
of the 17 Sustainable Development Goals (see

Annexes 1 and 3). The assessment considers the
policy action taken by Poland to date ( 39) and the
commitments in its recovery and resilience plan
(RRP) ( 40). At this stage of RRP implementation,
33% of the CSRs focusing on structural issues
from 2019-2022 have recorded at least ‘some Some Progress
25%
progress’, while 50% recorded ‘limited progress’
(see Graph A2.1). As the RRP is implemented
further, considerable progress in addressing Limited Progress
50%
structural CSRs is expected in the years to come.
Source: European Commission
(38) 2022 CSRs: EUR-Lex - 32022H0901(21) - EN - EUR-Lex

(europa.eu)
2021 CSRs: EUR-Lex - 32021H0729(21) - EN - EUR-Lex
(europa.eu)
(europa.eu)
(europa.eu)
(39) Including policy action reported in the national reform
programme and in Recovery and Resilience Facility (RRF)
reporting (twice a year reporting on progress in implementing
milestones and targets and resulting from the payment
requests assessment).
(40) Member States were asked to effectively address all or a
significant subset of the relevant country-specific
recommendations issued by the Council in 2019 and 2020 in
their RRPs. The CSR assessment presented here considers the
degree of implementation of the measures included in the
RRP and of those carried out outside of the RRP at the time
of assessment. Measures laid down in the Annex of the
adopted Council Implementing Decision on approving the
assessment of the RRP, which are not yet adopted or
implemented but considered credibly announced, in line with
the CSR assessment methodology, warrant ‘limited progress’.
Once implemented, these measures can lead to
‘some/substantial progress or full implementation’,
depending on their relevance.
24
Table A2.1:Summary table on 2019-2022 CSRs
Poland Assessment in May 2023* RRP coverage of CSRs until 2026 Relevant SDGs
2019 CSR 1 Some progress
Ensure that the nominal growth rate of net primary government expenditure does not exceed 4.4% in
Not relevant anymore Not applicable SDG 8, 16
2020, corresponding to an annual structural adjustment of 0.6% of GDP.
Take further steps to improve the efficiency of public spending, including by improving the budgetary Relevant RRP measures planned as of
Some progress SDG 8, 16
process. 2021, 2022, and 2025.
2019 CSR 2 Limited progress
Ensure the adequacy of future pension benefits and the sustainability of the pension system by taking Relevant RRP measures planned as of
Limited progress SDG 8
measures to increase the effective retirement age and by reforming the preferential pension schemes. 2022.
Take steps to increase labour market participation, including by improving access to childcare and long- Relevant RRP measures planned as of
Limited progress SDG 3, 4, 5, 8
term care, and remove remaining obstacles to more permanent types of employment. 2022, 2023, 2024, and 2026.
Relevant RRP measures planned as of
Foster quality education and skills relevant to the labour market, especially through adult learning. Limited progress SDG 4
2022, 2023, 2024, 2025, and 2026.
Strengthen the innovative capacity of the economy, including by supporting research institutions and Relevant RRP measures planned as of
Some progress SDG 9
their closer collaboration with business. 2022, and 2025.
Focus investment-related economic policy on innovation Limited progress SDG 9, 10, 11
2022, 2024, 2025 and 2026.
[Focus investment-related economic policy on] transport, notably on its sustainability Limited progress SDG 10, 11
2022, 2023, 2024, 2025 and 2026.
[Focus investment-related economic policy on] digital [infrastructure] Substantial progress SDG 9, 10, 11
2022, 2023, 2024, 2025 and 2026.
[Focus investment-related economic policy on] energy infrastructure Some progress SDG 7, 9, 10, 11, 13
2024, 2025 and 2026.
[Focus investment-related economic policy on] healthcare Limited progress SDG 3, 10, 11
2022, 2023, 2024, 2025 and 2026.
[Focus investment-related economic policy on] cleaner energy, taking into account regional disparities Limited progress SDG 7, 9, 10, 11, 13
2022, 2023, 2024, 2025 and 2026.
Improve the regulatory environment, in particular by strengthening the role of consultations of social Relevant RRP measures planned as of
No progress SDG 16
partners and public consultations in the legislative process. 2022, and 2023.
Take all necessary measures, in line with the general escape clause of the Stability and Growth Pact,
to effectively address the COVID-19 pandemic, sustain the economy and support the ensuing recovery.
Not relevant anymore Not applicable SDG 8, 16
When economic conditions allow, pursue fiscal policies aimed at achieving prudent medium-term fiscal
positions and ensuring debt sustainability, while enhancing investment.
Improve resilience, accessibility and effectiveness of the health system, including by providing sufficient Relevant RRP measures planned as of
resources and accelerating the deployment of e-health services. 2022, 2023, 2024, 2025 and 2026.
Mitigate the employment impact of the crisis, in particular by enhancing flexible and short time working Relevant RRP measures planned as of
Some progress SDG 8
arrangements. 2023.
Better target social benefits and ensure access to those in need. No progress SDG 1, 2, 10
Improve digital skills. Limited progress SDG 4
2022, 2023, 2024, 2025 and 2026.
Further promote the digital transformation of companies and public administration. Some progress SDG 9, 16
2022, 2023, 2024, 2025 and 2026.
Continue efforts to secure access to finance and liquidity for companies. Full implementation SDG 8, 9
Front-load mature public investment projects Some progress SDG 8, 16
2022, 2023, 2024, 2025 and 2026.
and promote private investment to foster the economic recovery. Limited progress SDG 8, 9
2022, 2023, 2024, 2025 and 2026.
Focus investment on the green and digital transition, in particular on digital infrastructure, Limited progress SDG 9, 10, 11
2022, 2023, 2024, 2025 and 2026.
clean and efficient production and use of energy, Limited progress SDG 7, 9, 10, 11, 13
2022, 2023, 2024, 2025 and 2026.
and sustainable transport, Limited progress SDG 10, 11
2022, 2023, 2024, 2025 and 2026.
contributing to a progressive decarbonisation of the economy, including in the coal regions. Limited progress SDG 6, 10, 11, 12, 15
2022, and 2023.
2020 CSR 4 No progress
Enhance the investment climate, in particular by safeguarding judicial independence. No progress SDG 16
2022 and 2023.
Ensure effective public consultations and involvement of social partners in the policymaking process. No progress SDG 16
2022, and 2023.
2021 CSR 1 Some progress

In 2022, pursue a supportive fiscal stance, including the impulse provided by the Recovery and
Full implementation Not applicable SDG 8, 16
Resilience Facility, and preserve nationally financed investment.
When economic conditions allow, pursue a fiscal policy aimed at achieving prudent medium-term fiscal
Some progress Not applicable SDG 8, 16
positions and ensuring fiscal sustainability in the medium term.
At the same time, enhance investment to boost growth potential. Pay particular attention to the
composition of public finances, on both the revenue and expenditure sides of the budget, and to the
quality of budgetary measures in order to ensure a sustainable and inclusive recovery. Prioritise Substantial progress Not applicable SDG 8, 16
sustainable and growth-enhancing investment, in particular investment supporting the green and digital
transition.
Give priority to fiscal structural reforms that will help provide financing for public policy priorities and
contribute to the long-term sustainability of public finances, including, where relevant, by strengthening No progress Not applicable SDG 8, 16
the coverage, adequacy and sustainability of health and social protection systems for all.
(Continued on the next page)
25
Table (continued)
In 2023, ensure that the growth of nationally financed primary current expenditure is in line with an
overall neutral policy stance, taking into account continued temporary and targeted support to
No progress Not applicable SDG 8, 16
households and firms most vulnerable to energy price hikes and to people fleeing Ukraine. Stand ready
to adjust current spending to the evolving situation.
Expand public investment for the green and digital transitions, and for energy security taking into
account the REPowerEU initiative, including by making use of the Recovery and Resilience Facility and Limited progress Not applicable SDG 8, 16
other Union funds.
For the period beyond 2023, pursue a fiscal policy aimed at achieving prudent medium-term fiscal
Some progress Not applicable SDG 8, 16
positions.
Improve the efficiency of public spending, including by continuing the reform of the budget system. Some progress SDG 8, 16
2021, 2022, and 2025.
Ensure the adequacy of future pension benefits and the sustainability of the pension system by taking Relevant RRP measures planned as of
measures to increase the effective retirement age and by reforming the preferential pension schemes. 2022.
2022 CSR 2
Swiftly finalise the negotiations with the Commission of the 2021-2027 cohesion policy programming Progress on the cohesion policy programming documents is monitored under the EU cohesion
documents with a view to starting their implementation. policy.
Increase labour market participation, including by improving access to childcare and longterm care, and Relevant RRP measures planned as of
Limited Progress SDG 3, 4, 5, 8
remove remaining obstacles to more permanent types of employment. 2022, 2023, 2024, and 2026.
Foster quality education and skills relevant to the labour market, especially through adult learning and Relevant RRP measures planned as of
Limited Progress SDG 4
improving digital skills. 2022, 2023, 2024, 2025 and 2026.
Better target social benefits and ensure access to those in need. No Progress SDG 1, 2, 10
Improve the resilience, accessibility and effectiveness of the health system, including by providing
sufficient resources to reverse the pyramid of care and accelerating the deployment of e-health Limited Progress SDG 3
2022, 2023, 2024, 2025 and 2026.
services.
Strengthen the innovative capacity of the economy, including by supporting research institutions and Relevant RRP measures planned as of
Some Progress SDG 9
their closer collaboration with business. 2022, 2024, 2025 and 2026.
Enhance further digitalisation of businesses and public administration, including through development Relevant RRP measures planned as of
Some Progress SDG 9, 16
of infrastructure. 2022, 2023, 2024, 2025 and 2026.
Enhance the investment climate, in particular by safeguarding judicial independence. Limited Progress SDG 16
2022 and 2023.
Ensure effective public consultations and involvement of social partners in the policymaking process. No Progress SDG 16
2022, and 2023.
Reduce overall reliance on fossil fuels Limited Progress SDG 7, 9, 13
2022, 2023, 2024, 2025 and 2026.
by removing regulatory, administrative and infrastructural barriers to accelerate permitting procedures Relevant RRP measures planned as of
Limited Progress SDG 7, 8, 9, 13
and deployment of renewable energy sources. 2022, 2023, 2024, 2025 and 2026.
Reform building renovation policies and support schemes to incentivise deeper energy efficiency,
promote energy savings and faster phase-out of fossil fuels in heating and accelerated deployment of Some Progress SDG 7
2022, 2023, and 2026.
heat pumps.
Accelerate modal shift towards public transport and active mobility and promote faster uptake of electric Relevant RRP measures planned as of
Limited Progress SDG 11
vehicles with incentives and investment in charging infrastructure. 2022, 2023, 2024, 2025 and 2026.
Improve long- and medium-term strategic planning of the green transition by updating national energy
policies in line with the European Green Deal objectives and the REPowerEU Communication to Relevant RRP measures planned as of
No Progress SDG 7, 9, 11, 13
provide certainty to the business community and use funding effectively with a view to accelerating 2022, 2023, 2024, 2025 and 2026.
clean energy investments.
Note:
* See footnote (40).
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the
RRP are necessary to fully implement CSRs and address their underlying challenges. Measures indicated as 'being implemented'
are only those included in the RRF payment requests submitted and positively assessed by the European Commission.
26
ANNEX 3: RECOVERY AND RESILIENCE PLAN - OVERVIEW
Table A3.1:Key elements of Poland's RRP Since the entry into force of the RRF
Regulation and the assessment of the
Current RRP national recovery and resilience plans,
geopolitical and economic developments
Scope Initial plan
have caused major disruptions across the EU.
CID adoption date (date of In order to effectively address these disruptions,
17 June 2022
submission) the (adjusted) RRF Regulation allows Member
EUR 23.9 billion in grants States to amend their recovery and resilience plan
Total allocation (6.2% of 2021 GDP) and EUR for a variety of reasons. In line with article 11(2)
11,5 billion in loans of the RRF, the maximum financial contribution for
Poland was moreover updated on 30 June 2022 to
53 investments and an amount of EUR 22.5 billion in grants.
Investments and reforms
49 reforms
Total number of Poland’s progress in implementing its plan is
223
milestones and targets
published in the Recovery and Resilience
Source: RRF Scoreboard
Scoreboard. The Scoreboard also gives an
overview of the progress made in implementing
The Recovery and Resilience Facility (RRF) is the RRF as a whole, in a transparent manner.
the centrepiece of the EU’s efforts to help it
recover from the COVID-19 pandemic, speed No disbursements have yet been made to
up the twin transition and strengthen Poland. Due to the late submission of the RRP,
resilience against future shocks. The RRF Poland was not eligible for pre-financing.
also contributes to implementation of the Disbursement of the allocation for Poland will
SDGs and helps to address the Country depend on the progress in implementing the plan.
Specific Recommendations (see Annex 2).
Poland submitted its current recovery and
resilience plan (RRP) on 3 May 2021. The
Commission’s positive assessment on 1 June 2022
and Council’s approval on 17 June 2022 paved the
way for disbursing EUR 23.9 billion in grants and
EUR 11.5 in loans under the RRF over the 2022-
2026 period.
Graph A3.1: Share of RRF funds contribution to each policy pillar

80%
70%
60%
50%
40%
30%
20%
10%
0%
Green transition Digital Smart, Social and Health, and Policies for the
transformation sustainable and territorial economic, social next generation
inclusive growth cohesion and institutional
resilience
Note: Each measure contributes towards two policy areas of the six pillars, therefore the total contribution to all pillars displayed
on this chart amounts to 200% of the estimated cost of the RRP. The bottom part represents the amount of the primary pillar, the
top part the amount of the secondary pillar.
Source: RRF Scoreboard
27
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH
The EU budget of over EUR 1.2 trillion for EUR 874 million in additional private investment. It
2021-2027 is geared towards implementing will also help to improve the energy performance
the EU’s main priorities. Cohesion policy of 21 380 dwellings in Lower Silesia. Under the
investment amounts to EUR 392 billion across the European Social Fund Plus (ESF+), Poland allocates
EU and represents almost a third of the overall EU EUR 2.8 billion to education and EUR 1.3 billon to
budget, including around EUR 48 billion invested in lifelong learning and skills. It will strengthen green
line with REPowerEU objectives. and digital skills by aligning vocational education
and training (VET) with labour market demand and
Graph A4.1: Cohesion policy funds 2021-2027 in supporting upskilling in the green and digital
Poland: budget by fund economy, with a focus on women and vulnerable
4,777
groups. EUR 900 million is allocated to measures
13,274
15,597
5% 14% to achieve gender balance in the labour market.
17%
Of the investments mentioned above, EUR

12.7 billion will be invested in line with
REPowerEU objectives. This is on top of the EUR
6.7 billion dedicated to REPowerEU under the
58,377
64% 2014-2020 budget. EUR 8 billion (2021-2027)
and EUR 3.2 billion (2014-2020) is for improving
CF ERDF ESF+ JTF
energy efficiency; EUR 2.1 billion (2021-2027) and
(1) million EUR in current prices, % of total; (total amount EUR 3.5 million (2014-2020) is for renewable
including EU and national co-financing) energy and low-carbon R&I; and EUR 2.6 billion
Source: European Commission, Cohesion Open Data (2021-2027) is for smart energy systems.
In 2021-2027, in Poland, cohesion policy Graph A4.2: Synergies between cohesion policy
funds ( 41) will invest EUR 48.7 billion in the green funds and RRF six pillars in Poland
transition and EUR 3.8 billion in the digital 60000
transformation as part of the country’s total 50000

46,466
48,682
allocation of EUR 92 billion. In particular, the 40000
European Regional Development Fund (ERDF) will 30000
support the energy transition, a strategic priority in 20000 17,335 14,022

13,481
Poland in 2021-2027. It will increase by 601 MW 10000
3,605
3,759 5,182
2,741
3,… 3,226
the capacity to produce renewable energy. 0

Green transition Digital
1,588
Smart, sustainable Social and territorial Health, economic, Policies for the next
Together with the Cohesion Fund (CF), it will transformation and inclusive growth cohesion social and
institutional
resilience
generation
improve the energy performance of over 259 470 EU CP 2014-2020 (million EUR) EU CP 2021-2027 (million EUR)
dwellings. The ERDF will also invest in sustainable

(1) million EUR in current prices (total amount, including EU
transport by supporting 840 km of railway lines and national co-financing)
and an additional 1 685 km of cycling roads. The Source: European Commission
ERDF will support equal access to internet,
providing access to ultra-fast broadband to more In 2014-2020 cohesion policy funds made
than 880 000 households and businesses. Due to EUR 78.8 billion available to Poland ( 42), with
a significant increase in repayable forms of an absorption of 91% ( 43). Including national
support, particularly in the energy sector, financial financing, the total investment amounts to EUR
instruments should be used strategically. The Just 92.6 billion - around 0.1% of GDP for 2014-2020.
Transition Fund (JTF) will help workers and
businesses in five (post) coal-mining regions to
find new jobs and activities. In Silesia, the largest
EU coal region, the JTF will support 1 940
businesses, create 27 000 new jobs, and generate (42) Cohesion policy funds include the ERDF, CF, ESF and the
Youth Employment Initiative (YEI). ETC programmes are
excluded here. According to the ‘N+3 rule’, the funds
committed for 2014-2020 must be spent by 2023. REACT-
(41) European Regional Development Fund (ERDF), Cohesion Fund
EU is included in all figures. Total amount including EU and
(CF), European Social Fund+ (ESF+), Just Transition Fund national co-financing. Data source: Cohesion Open Data.
(JTF), excluding Interreg programmes. The total amount
includes national and EU contributions. Data source: (43) 2014-2020 Cohesion policy EU payments by MS is updated
Cohesion Open Data. daily on Cohesion Open Data.
28
Poland continues to benefit from cohesion Other EU funds make significant resources
policy flexibility to support economic available for Poland. The common agricultural
recovery, step up convergence and provide policy (CAP) made EUR 42.0 billion available in
vital support to regions following the COVID- 2014-2022, and will continue to support Poland
19 pandemic. The Recovery Assistance for with EUR 22.1 billion in 2023-2027. The two CAP
Cohesion and the Territories of Europe instrument Funds (European Agricultural Guarantee Fund and
(REACT-EU) ( 44) under NextGenerationEU provides European Agricultural Fund for Rural Development)
EUR 1.9 billion on top of the 2014-2020 cohesion contribute to the European Green Deal while
policy allocation for Poland. On this, EUR 304 ensuring long-term food security. They promote
million has been allocated to the ‘digital commune’ social, environmental and economic sustainability
project on digital maturity, resistance and and innovation in agriculture and rural areas, in
cybersecurity in the 2 437 local governments most coordination with other EU funds. The European
affected by the COVID-19. REACT-EU also Maritime and Fisheries Fund made EUR 531
supported 2 000 primary healthcare centres. In million available to Poland in 2014-2020 and the
addition, Cohesion’s Action for Refugees in Europe European Maritime, Fisheries and Aquaculture
(CARE) supports Poland and its regions in providing Fund allocates EUR 512 million in 2021-2027.
emergency assistance to people fleeing from
Russia’s invasion of Ukraine, with a total budget of Poland also benefits from other EU
EUR 90 million. With SAFE (Supporting Affordable programmes, notably the Connecting Europe
Energy), the 2014-2020 cohesion policy funds Facility, which under CEF 2 (2021-2027) has so
may also be mobilised to support vulnerable far allocated EU funding of EUR 1.36 billion to 15
households, jobs and companies particularly specific projects on strategic transport networks.
affected by high energy prices. Similarly, Horizon Europe has so far allocated
more than EUR 153 million to Polish R&I actors on
Graph A4.3: Cohesion policy funds contribution to top of the EUR 746 million earmarked under the
the SDGs in 2014-2020 and 2021-2027 in Poland previous programme (Horizon 2020). The Public
Sector Loan Facility set up under the Just
50,000
45,000
44,973 Transition Mechanism makes EUR 292 million of
40,000
grant support from the Commission available for
35,000
34,620
projects in Poland for 2021-2027, which will be
30,000 combined with loans from the EIB to support
25,000
investments by public sector entities in just
20,000
15,000 13,017 13,860

12,259
transition regions.
10,000 7,429
5,000
5,560 5,812
2,985
5,403
Poland received support under the European
0
SDG 9 Industry, SDG 7 Affordable SDG 8 Decent SDG 4 Quality SDG 1 No poverty
instrument for temporary support to
innovation,
infrastructure
and clean energy work and
economic growth
education
mitigate unemployment risks in an
EU CP 2014-2020 (millions EUR) EU CP 2021-2027 (millions EUR) emergency (SURE) to finance short-time work
(1) 5 largest contributions to SDGs in million (EUR) current
schemes, similar measures, and ancillary health-
prices related measures, to mitigate the impact of
Source: European Commission COVID-19. The Council granted financial
assistance to Poland of EUR 11.3 billion in loans,
In both 2014-2020 and 2021-2027, cohesion which supported around 20% of workers and 10%
policy funds have contributed substantially of firms in 2020.
to the Sustainable Development Goals
(SDGs). These funds support 11 of the 17 SDGs, The Technical Support Instrument (TSI)
notably SDG 9 ‘Industry, innovation, infrastructure’ supports Poland in designing and
and SDG 7 ‘Affordable and clean energy’ ( 45). implementing growth-enhancing reforms,
including those set out in its recovery and
resilience plan (RRP). Poland has received
(44) REACT-EU allocation on Cohesion Open Data. significant technical support since 2017,
(45) Other EU funds contribute to the implementation of the including ( 46) support to reform the budgetary
SDGs, in 2014-2022 this includes both the European process, develop digital competences, strengthen
Agricultural Fund for Rural Development (EARDF) and the
European Maritime and Fisheries Fund (EMFF). (46) Country factsheets on reform support are available here.
29
the competitiveness of the railway sector and
enhance green mobility.
30
ANNEX 5: RESILIENCE
This Annex illustrates Poland’s relative RDB indicators. It has medium resilience
resilience capacities and vulnerabilities using capacities in all four dimensions of the RDB.
the Commission’s resilience dashboards Poland shows stronger capacities than the EU
(RDB) ( 47). Comprising a set of 124 quantitative average in the areas ‘raw material and energy
indicators, the RDB provide broad indications of supply’ and 'value chains and trade’. There is room
Member States’ ability to make progress across for improving capacities compared to the EU with
four interrelated dimensions: social and economic, respect to ‘financial globalisation’, ‘climate change
green, digital, and geopolitical. The indicators show mitigation and adaptation’, digitalisation, ‘security
vulnerabilities ( 48) and capacities ( 49) that can and demography’ and ‘inequalities and social
become increasingly relevant, both to navigate impact of the transitions’.
ongoing transitions and to cope with potential
future shocks. To this end, the RDB help to identify Table A5.1:Resilience indices summarising the
areas that need further efforts to build stronger situation across RDB dimensions and areas
and more resilient economies and societies. They Dimension/Area Vulnerabilities Capacities
PL EU-27 PL EU-27
are summarised in Table A5.1 as synthetic Social and economic
resilience indices, which illustrate the overall Inequalities and social impact of
relative situation for each of the four dimensions the transitions
Health, education and work
and their underlying areas for Poland and the EU-
27 ( 50). Economic & financial stability
and sustainability
Green
According to the set of resilience indicators Climate change mitigation &

adaptation
under the RDB, Poland generally displays a Sustainable use of resources
similar level of vulnerabilities compared to Ecosystems, biodiversity,

the EU average. Poland shows medium-high sustainable agriculture
Digital
vulnerabilities in the digital dimension of the RDB,
Digital for personal space
medium vulnerabilities in the social and economic
Digital for industry
and the green dimensions, and medium-low Vulnerabilities Index
vulnerabilities in the geopolitical dimension. It has Digital for public space High
Medium-high
higher vulnerabilities than the EU average in the Cybersecurity Medium
Medium-low
areas ‘sustainable use of resources’ and Geopolitical Low
'digitalisation for industry and public space'. Raw material and energy supply
Not available
Poland has relatively low vulnerabilities in relation Value chains and trade
Capacities Index
High
to ‘raw material and energy supply’, Medium-high
Financial globalisation Medium
‘cybersecurity’, 'inequalities and social impact of Medium-low
the transitions’, ‘security and demography’, and Security and demography Low
Not available
‘economic and financial stability and (1) Data are for 2021, and EU-27 refers to the value for the
sustainability’. EU as a whole. Data underlying EU-27 vulnerabilities in the
area ‘value chains and trade’ are not available as they
Compared to the EU average, Poland shows comprise partner concentration measures that are not
comparable with Member States’ level values.
an overall lower level of capacities across all
Source: JRC Resilience Dashboards - European Commission
(47) For details see https://ec.europa.eu/info/strategy/strategic-

planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en; see also 2020 Strategic
Foresight Report (COM(2020) 493).
(48) Vulnerabilities describe features that can exacerbate the
negative impact of crises and transitions, or obstacles that
may hinder the achievement of long-term strategic goals.
(49) Capacities refer to enablers or abilities to cope with crises
and structural changes and to manage the transitions.
(50) This Annex is linked to Annex 1 on SDGs, Annex 6 on the
green deal, Annex 8 on the fair transition to climate
neutrality, Annex 9 on resource productivity, efficiency and
circularity, Annex 10 on the digital transition and Annex 14
on the European pillar of social rights.
31
ENVIRONMENTAL SUSTAINABILITY
ANNEX 6: EUROPEAN GREEN DEAL
Poland’s green transition requires continued attributed 42.7 % of its Recovery and Resilience
action on several aspects including Facility allocation to key reforms and investments
advancing the deployment of renewables, to attain climate objectives ( 55). According to its
improving energy efficiency, and reducing national energy strategy, Poland aims to reduce
emissions from road transport. Implementation economy-wide greenhouse gas emissions by 30 %
of the European Green Deal is underway in Poland; by 2030 compared to 1990 (56).
this Annex provides offers a snapshot of the key
areas involved ( 51). Graph A6.1: Thematic – greenhouse gas emissions
from the effort sharing sectors in Mt CO2eq,
Poland has not yet defined all the climate 2005-2021
policy measures it needs to reach its 2030 250
climate target for the effort sharing 200
sectors ( 52). Data for 2021 on greenhouse gas

150
emissions in these sectors are expected to show
the country generated slightly less than its annual 100
emission allocations ( 53). Current policies in Poland 50

are projected to keep the increase of these
emissions contained at 6% relative to 2005 levels 0
2005 2021
in 2030. This is too high to comply with the effort Domestic transport (excl. aviation) Buildings (under ESR) Agriculture Small industry Waste
sharing target even before the target was made Source: European Environmental Agency.
more ambitious to meet the EU’s 55% objective.
The additional measures tabled would reduce the
Poland is not on track to meet its net carbon
greenhouse gas emissions of these sectors by
12%, meeting the present target but not reaching removals target for 2030 for its land use
the new target to reduce by 17.7% (54). In its sector. Poland’s net removals have been in
recovery and resilience plan (RRP), Poland has decline mainly due to forest land management.
For 2030, Poland’s land use, land use change and
(51) The overview in this Annex is complemented by the forestry (LULUCF) target implies to remove 38 098
information in Annex 7 on energy security and affordability, kt CO2eq, significantly higher than the present
Annex 8 on the fair transition to climate neutrality and level of net removals (see Table A6.1) ( 57).
environmental sustainability, Annex 9 on resource
productivity, efficiency and circularity, Annex 11 on
innovation, and Annex 19 on taxation.
Poland’s economy still heavily depends on
fossil fuels, particularly coal. In 2021, fossil
(52) Member States’ greenhouse gas emission targets for 2030
(‘effort sharing targets’) were increased by Regulation (EU) fuels provided for almost 90% of Poland’s energy
2023/857 (the Effort Sharing Regulation) amending mix, with coal alone accounting for 42%. Despite
Regulation (EU) 2018/842, aligning the action in the positive progress on solar PV power generation,
concerned sectors with the objective to reach EU-level, renewables provided only 13% of the energy mix
economy-wide greenhouse gas emission reductions of at
least 55% relative to 1990 levels. The Regulation sets in 2021. Poland’s electricity mix also relies highly
national targets for sectors outside the current EU Emissions on coal, which in 2021 provided 72% of total
Trading System, notably: buildings (heating and cooling), road
transport, agriculture, waste, and small industry. Emissions
covered by the EU ETS and the Effort Sharing Regulation are (55) For example, reforms and investments in renewables
complemented by net removals in the land use sector, (onshore and offshore wind, photovoltaic energy, energy
regulated by Regulation (EU) 2018/841 (the Land Use, Land communities) and green hydrogen, decarbonisation of
Use Change and Forestry (LULUCF) Regulation) amended by heating and thermal modernisation of buildings, greening of
Regulation (EU) 2023/839. cities and public transport, and improving water
(53) Poland's annual emission allocations for 2021 were some management.
210.4 Mt CO2eq, and its approximated 2021 emissions were (56) Under Poland’s national energy strategy with an outlook for
at 209.7 Mt (see European Commission, Accelerating the 2040. The target is not included in Poland’s national energy
transition to climate neutrality for Europe’s security and and climate plan. An update of the plan, mandated by
prosperity: EU Climate Action Progress Report 2022, Regulation (EU) 2018/1999 (the Governance Regulation), is
SWD(2022)343). underway. The national energy strategy is expected to be
updated together with the plan.
(54) See the information on the distance to the 2030 climate
policy target in Table A6.1. Existing and additional measures (57) This value is indicative and will be updated in 2025 (as
as of 15 March 2021. mandated by Regulation (EU) 2023/839).
32
electricity, while 18% came from renewable construction of onshore wind energy plants. The
sources. According to its national energy and plan also envisages support for the development
climate Plan (NECP), in 2030, the share of of renewable and low-carbon hydrogen
renewable energy in Poland’s energy mix should technologies, and local renewable energy sources
increase to between 21 and 23% of gross final by energy communities. It also envisages
energy consumption. This target was considered significant investments in the development of
unambitious in the Commission 2020 assessment. transmission and distribution networks and of
Poland will need to substantially strengthen its smart electricity infrastructure, to further enable
renewable energy target in the updated NECP to renewables to be integrated into the energy mix.
reflect the more ambitious EU climate and energy Poland has also started studies and investments
targets in the Fit for 55 Package and in the to achieve mid-term goals in the field of civilian
REPowerEU Plan. nuclear power and as regards small modular
reactors to decarbonise its energy consumption.
Graph A6.2: Energy mix (top) and electricity mix
(bottom), 2021 Reducing energy consumption by improving
energy efficiency across Poland’s economy is
indispensable to decreasing the country’s
13% dependency on fossil fuels and carrying out
the energy transition in a cost-effective
Solid fossil fuels, peat manner. Poland’s NECP targets for primary and
and oil shale
42% final energy consumption (PEC and FEC) were
Gas
considered of modest ambition in the Commission
29%
Oil 2020 assessment. Final energy consumption in
Renewables
Poland was 75.2 Mtoe in 2021, mainly increasing
throughout the last 10 years, except in 2020, due
to the exceptional COVID-19 measures, which was
followed by a rebound in 2021, equal to a 5.6%
16%
increase. Based on the energy consumption
trajectory for 2018-2021, Poland is not expected
18% to be on track to meet its 2030 target for PEC and
FEC, as these were notified in its NECP ( 58).
1%
Coal and coal products
The energy component of Poland’s RRP
Natural gas
9%
Oil and oil products
strongly focuses on energy efficiency. It
Renewables includes measures to optimise i) support to energy
efficiency investments in private and public
72%
buildings, ii) changes in the heating sources, iii)
reforms to reduce the energy consumption of
companies as well as iv) updates to the clean air
priority programme, Poland’s main vehicle for the
The energy mix is based on gross inland consumption, and reducing emissions in buildings, which encourages
excludes heat and electricity. The share of renewables complementing the replacement of coal boilers
includes biofuels and non-renewable waste. with energy efficiency measures (thermo-
Source: Eurostat modernisation). The plan also envisages
investment to modernise district heating systems,
Untapping the potential of renewable energy which focuses on replacing heat sources. This
is crucial to decarbonising Poland’s energy investment is to be complemented by funding
system. Against this backdrop, a successful from the regional programmes that will focus on
implementation of Poland’s RRP could have a network refurbishment.
transformative impact and shift the country’s
energy mix towards low and zero-carbon
technologies. The plan includes funding for (58) After the conclusion of the negotiations for a recast EED, the
offshore wind energy plants and terminal ambition of both the EU and national targets as well as of
infrastructure, as well as crucial changes to the the national measures for energy efficiency to meet these
regulatory environment aimed at speeding up the targets is expected to increase
33
In Poland, a shift to sustainable mobility still Graph A6.3: Thematic – environmental investment
lies ahead, especially in road passenger needs and current investment, p.a. 2014-2020
transport. The market development for zero- 7000,0
emission passenger cars is lagging behind the 6.019
overall trend in the EU. The electrification of the 6000,0
railway network, however, is more advanced than

5000,0
in the EU on average. At the same time, individual
EUR million (at current prices)

3.686
transport exacerbates problems with air pollution 4000,0 3.405
and traffic congestion, with significant health and

economic costs in Poland’s cities. Poland has the 3000,0
1.963
potential to rely more on environmental taxes to 2000,0 2.313
further internalise the cost of air pollution, in line 1.882
596
with the polluter pays principle ( 59). As transport 1000,0 1.173 1.057
taxes represented only 0.18% of GDP (EU average 537
0,0
of 0.42%) in 2020, Poland would have scope to Pollution Water (industries, Circular economy Biodiversity and R&I&D and other
introduce a circulation tax, with a tax base related prevention and excl. protection)
control
(incl. waste) ecosystems
to emissions, on passenger car taxes (see Annex Current investment Total need
19). Source: European Commission.
Poland would benefit from investing more in

Climate change is affecting many key sectors
environmental protection and in measures
in Poland (63). Agriculture and forestry, energy,
protecting biodiversity and ecosystems (60).
the built environment, transport, health, and
Between 2014 and 2020, environmental
tourism are all under pressure, as the frequencies
investment needs were estimated to be at least
and intensities of extreme weather events
EUR 15.7 billion while yearly investment was at
(droughts, storms, floods, and heatwaves) are
just under EUR 7 billion, with a gap of at least EUR
rising ( 64). Longer droughts and heavy rainfall
8.7 billion, per year (see Graph A6.3) ( 61). Poland
disturb the growing season and depress
still needs to allocate sufficient resources to
agricultural yields. Heat-related mortality and
protecting and managing the Natura 2000
morbidity linked to pollution and allergens are
network ( 62). Investment is also urgently needed
rising. In both urban and rural areas, spatial
for preventing and controlling pollution, where the
planning needs to anticipate the impacts of
gap has been estimated at more than EUR 4.1
climate change. Further action also requires
billion per year between 2014 and 2020 (1.3% of
boosting the penetration and coverage of
GDP). These investments would help diminish the
insurance against environmental perils. Poland’s
health costs of air pollution (1 095 years of life
RRP includes measures on sustainable water
lost for 100 000 inhabitants due to PM2.5 in management and pollution management in the
2020, the third highest number in the EU) and Baltic Sea as well as others on greening the built
support the country’s resilience. environment in cities. A revision of the plan offers
an opportunity to scale up action in climate
adaptation. This entails factoring climate
adaptation considerations into sectoral policies,
(59) European Commission, 2021, Green taxation and other e.g. concerning increasingly scarce water supplies
economic instruments – Internalising environmental costs to
make the polluter pay, Ensuring that polluters pay
for the cooling of conventional energy plants,
(europa.eu). agricultural production, and drinking water. Poland
needs to prioritise sustainable water management
(60) Environmental objectives include pollution prevention and
control, water management and industries, circular economy by restoring terrestrial, marine, and freshwater
and waste, biodiversity and ecosystems (European ecosystems.
Commission, 2022, Environmental Implementation Review,
country report Poland).
(61) When also accounting for needs estimated at EU level only
(e.g. water protection, higher circularity, biodiversity strategy). (63) European Environmental Agency, Advancing towards climate
resilience in Europe, forthcoming.
(62) In 2021, Poland had 39.6% terrestrial protected areas
(Natura 2000 and nationally designated areas), against the (64) According to the 6th IPCC climate adaptation report, in
EU average of 26.4% (European Environment Agency, 2023, southern Europe, more than a third of the population will be
Natura 2000 Barometer). exposed to water scarcity at 2°C.
34
Poland provides fossil fuel and other
environmentally harmful subsidies that could
be considered for reform, while ensuring
food and energy security and mitigating
social effects. Poland’s fossil fuel subsidies have
been on the rise, especially for coal (0.20% of GDP
in 2020) and petroleum products (0.08% of GDP).
Poland allocates more to fossil fuel subsidies than
to renewable energy subsidies. This puts low
carbon alternatives at a disadvantage.
Environmentally harmful subsidies have been
identified, via an initial assessment, in the
agriculture, forestry and fishing, electricity, gas,
steam and air conditioning, transportation and
storage, mining and quarrying and services
sectors. Examples of such subsidies include the
flat rate taxation of privately used company cars,
the reduced VAT rate for fertilisers and pesticides,
the excise tax refund for diesel fuel used in
agriculture, the excise tax exemption on the use of
natural gas or the reduced CO2 tax rate on diesel
used in agriculture ( 65). A mapping of all
environmentally harmful subsidies by Poland
would help prioritise candidates for reform.
By earmarking a higher share of the EU

Emissions Trading System (ETS) revenue for
climate action, Poland could reduce its
exposure to the cost of carbon. Poland collects
some of the highest revenues from the EU ETS
both overall and per capita ( 66). However, on
average it allocated just 50% to climate and
energy-related purposes, the minimum as set out
in the ETS Directive.
(65) Fossil fuel figures in EUR of 2021 from the 2022 State of
the Energy Union report. Initial assessment of
environmentally harmful subsidies done by the Commission
in the 2022 toolbox for reforming environmentally harmful
subsidies in Europe, using OECD definitions, and based on the
following datasets: OECD Agriculture Policy Monitoring and
Evaluations; OECD Policy Instruments for the Environment
(PINE) Database; OECD Statistical Database for Fossil Fuels
Support; IMF country-level energy subsidy estimates. Annex 4
of the toolbox contains detailed examples of subsidies on
the candidates for reform.
(66) With ETS revenue increasing due to higher carbon prices, in
2021, Poland’s revenue from the EU ETS amounted to some
EUR 5.6 billion.
35
Table A6.1:Indicators tracking progress on the European Green Deal from a macroeconomic perspective
'Fit for 55'
2030 Distance
2005 2017 2018 2019 2020 2021 target/value WEM WAM
(1)
Greenhouse gas emission reductions in effort sharing sectors Mt CO2eq; %; pp 180,0 18% 18% 16% 14% - -17,7% -23,7 -5,7
Progress to policy targets
(2)
Net carbon removals from LULUCF kt CO2eq -48.019 -37.389 -36.748 -18.295 -18.958 -20.095 -38098 n/a n/a
National contribution to 2030 EU

2005 2017 2018 2019 2020 2021 target
Share of energy from renewable sources in gross final
% 7% 11% 15% 15% 16% 16% 21-23%
consumption of energy (3)
Energy efficiency: primary energy consumption (3) Mtoe 88,0 99,1 104,1 100,2 96,8 103,9 91,3
Energy efficiency: final energy consumption (3) Mtoe 58,5 70,9 74,9 73,7 71,1 75,2 67,1
Poland EU
2016 2017 2018 2019 2020 2021 2019 2020 2021
Environmental taxes (% of GDP) % of GDP 2,7 2,7 2,7 2,5 2,5 2,9 2,4 2,2 2,2
Fiscal and financial
Environmental taxes (% of total taxation) (4) % of taxation 8,1 7,9 7,7 7,2 7,1 7,8 5,9 5,6 5,5
indicators
Government expenditure on environmental protection % of total exp. 1,0 0,9 1,2 1,3 1,2 1,3 1,7 1,6 1,6
Investment in environmental protection (5) % of GDP 0,3 0,3 0,5 0,5 - - 0,4 0,4 0,4
Fossil fuel subsidies (6) EUR2021bn 2,1 2,7 2,1 1,4 1,9 - 53,0 50,0 -
Climate protection gap (7) score 1-4 1,6 1,5 1,5
Net greenhouse gas emissions 1990 = 100 84,0 88,0 87,0 83,0 84,0 84,0 76,0 69,0 72,0
Climate
Greenhouse gas emission intensity of the economy kg/EUR'10 0,96 0,95 0,90 0,82 0,80 - 0,31 0,30 0,26
Energy intensity of the economy kgoe/EUR'10 0,23 0,23 0,23 0,21 0,21 - 0,11 0,11 -
Final energy consumption (FEC) 2015=100 106,9 113,8 120,2 118,4 114,2 120,6 102,9 94,6 -
Energy
FEC in residential building sector 2015=100 104,5 105,4 118,5 110,3 110,9 116,3 101,3 101,3 106,8
FEC in services building sector 2015=100 108,4 102,6 101,1 99,6 96,7 108,3 100,1 94,4 100,7
Smog-precursor emission intensity (to GDP) (8) tonne/EUR'10 2,7 2,7 2,4 2,4 2,1 - 0,9 0,9 -
Pollution
Years of life lost due to air pollution by PM2.5 per 100.000 inh. 1440,9 1494,8 1536,6 1191,5 1095,4 - 581,6 544,5 -
Years of life lost due to air pollution by NO2 per 100.000 inh. 139,4 135,0 151,1 120,8 101,5 - 309,6 218,8 -
Nitrates in ground water mg NO3/litre - - - - - - 21,0 20,8 -
Land protected areas % of total 38,3 39,8 - 39,6 39,6 39,6 26,2 26,4 26,4
Biodiversity
Marine protected areas % of total 21,8 - - 21,8 - 21,9 10,7 - 12,1

% of total utilised
Organic farming 3,7 3,4 3,3 3,5 3,5 - 8,5 9,1 -
agricultural area
2017 2018 2019 2020 2021 2022 2020 2021 2022

% in new
Share of zero-emission vehicles (9) registrations
0,1 0,1 0,3 0,8 1,6 2,6 5,4 8,9 10,7
Mobility
Number of AC/DC recharging points (AFIR categorisation) - - - 1759 2767 3295 188626 330028 432518
Share of electrified railways % 63,6 63,7 64,2 64,2 64,2 64,2 56,6 n/a 56,6
Hours of congestion per commuting driver per year 25,0 24,4 25,2 25,2 n/a n/a 28,7 n/a n/a
Sources: (1) Historical and projected emissions, as well as Member States’ climate policy targets and 2005 base year emissions
under the Effort Sharing Decision (for 2020) are measured in global warming potential (GWP) values from the 4th Assessment
Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ climate policy targets and 2005 base
year emissions under the Effort Sharing Regulation (for 2030) are in GWP values from the 5th Assessment Report (AR5). The
table above shows the base year emissions 2005 under the Effort Sharing Decision, using AR4 GWP values. Emissions for 2017-
2021 are expressed in percentage change from 2005 base year emissions, with AR4 GWP values. 2021 data are preliminary. The
table shows the 2030 target under Regulation (EU) 2023/857 that aligns it with the EU’s 55% objective, in percentage change
from 2005 base year emissions (AR5 GWP). Distance to target is the gap between Member States’ 2030 target (with AR5 GWP
values) and projected emissions with existing measures (WEM) and with additional measures (WAM) (with AR4 GWP values), in
percentage change from the 2005 base year emissions. Due to the difference in global warming potential values, the distance to
target is only illustrative. The measures included reflect the state of play as of 15 March 2021.
(2) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2023
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839
amending Regulation (EU) 2018/841 (LULUCF Regulation) – Annex IIa, kilotons of CO2 equivalent, based on 2020 submissions.
(3) Renewable energy and energy efficiency targets and national contributions are in line with the methodology established under
Regulation (EU) 2018/1999 (Governance Regulation).
(4) Percentage of total revenue from taxes and social contributions (excluding imputed social contributions). Revenue from the EU
Emissions Trading System is included in environmental tax revenue.
(5) Expenditure on gross fixed capital formation for the production of environmental protection services (abatement and
prevention of pollution) covering government, industry, and specialised providers.
(6) European Commission, Study on energy subsidies and other government interventions in the European Union, 2022 edition.
(7) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters. This
indicator is based on modelling of the current risk from floods, wildfires and windstorms as well as earthquakes, and an
estimation of the current insurance penetration rate. The indicator does not provide information on the split between the
private/public costs of climate-related disasters. A score of 0 means no protection gap, while a score of 4 corresponds to a very
high gap (EIOPA, 2022).
(8) Sulphur oxides (SO2 equivalent), ammonia, particulates < 10 µm, nitrogen oxides in total economy (divided by GDP).
(9) Battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV).
36
ANNEX 7: ENERGY SECURITY AND AFFORDABILITY
Poland’s supply diversification efforts in transmission of 5.7 bcm to Poland. Additionally,

recent years have helped mitigate the impact Poland plans to open a Floating Storage and
of the halt in Russian supplies and avoid Regasification Unit on the Baltic Sea near Gdansk
major disruptions. Gazprom no longer supplies it in 2026, with an expected capacity of 6bcm of gas
with natural gas as of 28 April 2022, by unilateral per year.
decision, following Poland’s refusal to pay for gas
supplies in roubles. This Annex ( 67) sets out actions Since 25 February 2023, Russia has stopped
carried out by Poland to achieve the REPowerEU oil supplies via the Druzhba pipeline, however
objectives, including through the implementation Russia accounted only for about 10% of overall oil
of its recovery and resilience plan (RRP), in order to supplies and Poland is well positioned to swiftly
improve energy security and affordability while replace RU oil with alternative sources.
accelerating the clean energy transition, and
contributing to enhancing the EU’s competitiveness Poland is on track to fulfil its gas storage
in the clean energy sector ( 68). obligations. It fulfilled its gas storage obligations
last winter, reaching 98.91% by 1 November, and
Since 2014, Poland had already significantly ended the heating season with its gas storage
reduced its exposure to Russian gas through filled at 50.15% on April 15th 2023 ( 69). Its total
strategic investments aimed at diversifying storage capacity (3.73 bcm) is, however, relatively
gas supply routes. Its dependency on Russian small compared to its annual consumption of
gas has been decreasing in the last decade, from around 20 bcm/year. GSP, the owner and operator
around 76% in 2014 to 55% in 2021. Before of Poland’s seven gas storage facilities ( 70), is
Russia invaded Ukraine, it received the equivalent considering further expanding the total capacity.
of 10 billion cubic metres (bcm)/year of natural
gas from Gazprom, around 45% of its domestic Graph A7.1: Underground gas storage levels in
demand. The liquefied natural gas (LNG) terminal Poland
in Świnoujście, opened in 2016, with a maximum
regasification capacity of 5 bcm (54.4 TWh) per
year. Poland plans to expand this LNG terminal,
already expanded to 6.2 bcm/year in 2022, to 8.3
bcm/year in 2023. Key infrastructure projects have
been completed and became operational in 2022,
including the interconnector with Lithuania, the
Baltic Pipe, and the interconnector with Slovakia.
These projects became operational in November
2022 and their completion gave Poland enough
import capacity to entirely replace lost imports Source: JRC calculation based on AGSI+ Transparency
from Russia. In particular, the Baltic Pipe allows Platform, 2022 (Last update 1 May 2023)
transporting up to 10 bcm/year of gas from the
Norwegian shelf through Denmark and the Baltic Poland has taken several measures to
Sea to Poland. The interconnector with Lithuania decrease energy consumption and promote
gives Poland access to the Klaipedia LNG terminal
energy efficiency. On 15 July, the clean air plus
in Lithuania and – thanks to bilateral flows –
programme was launched, giving up to a 90%
makes it possible to adjust gas flows to the
subsidy to households for thermal modernisation;
shifting regional demand-supply dynamics, while
replacing outdated heating boilers, including
the interconnector with Slovakia enables the
(67) It is complemented by Annex 6 as the European Green Deal (69) Regulation of the European Parliament and of the Council
focuses on the clean energy transition, by Annex 8 on the amending Regulations (EU) 2017/1938 and (EC) No
actions taken to mitigate energy poverty and protect the 715/2009 with regard to gas storage and Implementing
most vulnerable ones, and by Annex 9 as the transition to a Regulation (EU) 2022/2301 of 23 November 2022 setting
circular economy will unlock significant energy and resource the filling trajectory with intermediary targets for 2023 for
savings, further strengthening energy security and each Member State with underground gas storage facilities
affordability. on its territory and directly interconnected to its market area.
(68) In line with the Green Deal Industrial Plan COM(2023) 62 (70) UGS Wierzchowice, VGS GIM Kawerna (Kosakowo, Mogilno)
final, and the proposed Net-Zero Industry Act COM(2023) and VGS GIM Sanok (Brzeznica, Husow, Strachocina,
161 final. Swarzow).
37
district heating connections. Moreover, as of significantly improve the ability of Poland to
January 3, the government has increased the integrate offshore energy into its grid. Under the
funding for thermal modernisation of houses and RRP, Poland has also committed itself to investing
heat sources replacement. Other measures to in transmission networks, including extensions to
promote energy savings include extending the link northern with southern parts of the country. It
white certificate scheme to the transport sector; a plans to develop 400 kV transmission lines with
programme supporting energy efficiency in relevant stations, to develop a data hub and to do
businesses using energy performance contracts; a power quality analysis of the electricity market.
and developing an energy savings registry. Recent
measures and high prices led to a gas demand Further reinforcements of its internal
reduction of about 13% over the period August transmission and distribution grids are
2022 – March 2023, narrowly missing the 15% needed to sustain the growth of renewable
target. The government has also imposed a capacity. Increased variable, renewable-based
mandatory 10% electricity consumption cut on generation, coupled with the expected growth in
national and local government administrations. electricity demand cause by the electrification of
the economy, will have an impact on both
Natural gas plays a relatively small role in distribution and transmission grid infrastructure.
Poland’s energy mix, with a share of 17%. Change in the electricity generation portfolio will
Most of the gas is consumed by industry (35%), need to be accompanied by more efficient use,
followed by the energy sector (25.8%) and smartening of and additional investments in the
households (25.8%). electricity network. The energy regulator (URE)
estimates that until 2030 some 100 billion PLN
Graph A7.2: Share of gas consumption per sector, should be invested to adapt the distribution grid to
2021 variable renewable and distributed energy sources.
In addition, up to 2032 over 32 billion PLN are
0.3%
planned to be invested in modernising the
25.8%
28.1%
Energy transmission network and enabling the
transmission of offshore wind electricity to
Industry
southern Poland, where industry is located.
Transport
Services and public sector Graph A7.3: Share of gas consumption per
industrial sector, 2021 (% of industry total gas
Households
9.1%
consumption)
Agriculture, forestry and
1.7% fishery
Textile and leather
35.0% Construction
Wood and wood products
Source: Eurostat Paper, pulp and printing
Food, beverages and tobacco
Poland still has few electricity Mining and quarrying
Machinery
interconnections with neighbouring countries. Transport equipment
The Polish allocation constraint also regularly Non-metallic minerals
limits cross-border capacity, which is often down Non-ferrous metals
to zero, negatively affecting Poland’s price signal. Chemical and petrochemical
Poland is participating as a constructing country in Iron and steel
the project for synchronising the three Baltic 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
countries with the European continental grid. To Source: Eurostat

this end, it is constructing three new electricity
lines and modernising another three in the
northeast of the country. These will enable the full
functionality of the Harmony Link, the undersea
high-voltage cable planned to be constructed with
Lithuania. With its development delayed due to the
current geopolitical context, it is now estimated to
be completed in 2028. These investments will also
38
Graph A7.4: Poland´s retail energy prices for 10% discount on their electricity bills. National and
industry (top) and households (bottom) local authorities were obliged to reduce their
electricity consumption by 10% starting on 1
250
October 2022. Gas prices for Polish consumers –
200 except businesses – are capped at EUR 43/MWh
150
following a bill passed in December, with an
€/MWh
additional VAT refund for the most vulnerable

100
people who use gas for heating purposes.
50
Renewables still play a minor role in Poland’s

0
energy mix, but recent years have seen
several positive developments, especially in
Gas Poland Gas EU Electricity Poland Electricity EU
solar energy. The renewable energy in the
300 final energy consumption amounts at
250 15.62% (2021). Between 2020 and 2022,
200 installed solar PV capacity in the country almost
quadrupled, from 3.9 GW to 11 GW ( 71), also
€/MWh
150
100
thanks to a very popular subsidy scheme for
50
rooftop solar panels. Prosumers account for more
than 70% of total installed solar capacity. There
0
are several incentive schemes to install and
generate solar power for systems of all capacity
Gas Poland Gas EU Electricity Poland Electricity EU ranges. On offshore wind, projects with a total
(1) On electricity, the band consumption is DC for households capacity of approximately 8.4 GW are currently in
and ID for industry the pipeline (5.9 GW under Phase I and 2.5 GW
(2) On gas, the band consumption is D2 for households and I4 under Phase II), and electricity from the first Polish
for industry offshore wind farm is scheduled to be fed into the
Source: Eurostat
grid in 2026. By contrast, onshore wind capacity
has been growing slowly. The development of wind
Recent price schemes for electricity provide power capacity, in 2022 equal to around 8 GW ( 72),
some incentives to save energy, but the has been constrained by the distance law (10 H),
newly established gas price cap does not which has the effect of limiting maximum installed
encourage consumption reductions. Poland has capacity to around 10GW. Poland has committed
been among the EU countries less affected by the itself to reforming the distance rule in its RRP. The
rise in energy prices. For electricity, this is also due amendment of the distance law (“10H”) has been
to the relatively small role of gas in Poland’s adopted in March 2023, lowering the minimum
power mix. In December 2022, retail electricity distance between turbines and housing to 700mt.
prices were EUR 188/MWh, vs the EU average of While this will have a positive impact on onshore
EUR 318/MWh. Similarly, retail gas prices of EUR wind development, it will leave significant part of
55/MWh were around one third of the EU average. onshore wind potential untapped. Compared to
Poland has introduced a cap on electricity prices the original government proposal to set the
for households, public interest organisations, small minimum distance at 500mt, the approved bill not
and medium-sized enterprises, and local only reduces the surface area available for
authorities. Electricity prices, expected to increase onshore wind substantially but in many cases will
significantly due to the tripling of coal prices and also require new planning procedures which would
the coal intensity of Poland’s power mix, are cause additional delays. The Polish Wind energy
frozen at their 2022 level. Individuals will pay association estimates that 10 GW new onshore
approximately PLN 420/MWh + VAT (approx. 90€) wind capacity could be installed by 2030 with a
for their electricity consumption up to 2 000 KWh 500m distance rule, while a rule of 700m would
Households who consume above this threshold will reduce this to 4 GW.
pay PLN 693/MWh (around 150€). The cap is PLN
785/MWh (170€) for the other entities/companies
the measures cover. Households and SMEs that
reduce their electricity use in 2023 by 10% (71) IRENA Renewable Energy Capacity Statistics
compared to 2022 will also be rewarded with a (72) IRENA Renewable Energy Capacity Statisticsprosu
39
Renewable hydrogen could play a significant based on coal. The rise in coal prices gave a
role in decarbonising the energy system, significant boost to heat pump deployments.
particularly for parts of the industry and Since 2017, annual installations have quadrupled.
transport sectors that are hard to Poland is one of Europe’s fastest growing markets
decarbonise. Poland is the third biggest hydrogen for heat pumps. In 2021 heat pumps sales have
producer in the EU, mostly grey hydrogen increase by around 67% compared to 2020, with
produced by refineries and chemical plants. The more than 93 000 units sold. This positive trend
government adopted a national hydrogen strategy continued in 2022, with a greater than 100%
in November 2021. The strategy sets a target of 2 year-on-year increase. This growth needs to
GW of installation capacity by 2030 and is mostly become structural to decarbonise the still coal-
focused on low-carbon hydrogen, but does not dependent heating sector.
clarify the sources of the additional electricity
necessary for hydrogen production. The strategy Industrial energy efficiency has improved
foresees end-use applications of hydrogen in the over the years, following the overall trend of
transport, industry and energy sectors. Poland has decreasing energy intensity of the Polish
the potential to produce and use biomethane from economy. The mandatory implementation of the
organic waste, sludge and farming. It has no energy audits recommendation, with a short
strategy or pilot plants to support the use of payback period (e.g. less than 5 years), could
biogases and has not done any studies on galvanise investments in energy efficiency in
appropriate locations for such plants. industry, further contributing to the development
of energy supply companies and/or the white
Structural renovation measures could help certificate market and significantly improving the
improve the energy performance of Poland’s energy efficiency of the industrial sector.
building stock and alleviate energy poverty Regarding market surveillance activities, Poland is
by helping households and business cope carrying out a relatively low number of checks on
with high energy prices. In the last decade, products covered by ecodesing and energy
energy demand in the building sector has labelling. This may imply some concerns as to the
decreased considerably, thanks both to energy compliance levels of the concerned products, and
efficiency improvements and the decline in the therefore missed energy and CO2 savings ( 74).
energy intensity of space heating systems.
However, the sector still has a high saving In key transition technologies, there has been
potential. The building stock is old, with 65% of a dramatic increase in photovoltaic capacity
buildings over 30 years old. Around a fifth of and heat pumps. With the LG Chem batteries
households in Poland suffer from energy poverty gigafactory and Northvolt subsidiaries located in
and two-thirds of the building stock still lack Poland, the country is well placed to further
proper insulation ( 73). Coal covers around half of develop the batteries market for the electric
residential buildings’ heating demand. Major vehicles segment, but also for stationary
renovations, together with thermal renovations to applications, (batteries for the industrial storage,
move away from fossil fuel-based energy sources, or for homes to be able to store the energy they
will be crucial for Poland to attain the long-term produce). Despite these positive developments,
renovation strategy’s 2030 goals. The energy Poland’s public research & development (R&D)
services market is not well developed, despite spending on Energy Union priorities has been
some supportive elements and framework declining in recent years, going from 0.03% of
conditions (e.g. the white certificate scheme). GDP in 2014 to 0.013% in 2020.
The transition of the district heating sector

is yet another major challenge for the energy
transition. Only about 20% of Polish district
heating systems qualified as energy-efficient in
2018, in line with the definition of efficient district
heating and cooling in the Energy Efficiency
Directive, while 76% of district heating supply was
(74) The internet-supported information and communication

( ) Polish edition of the Velux Healthy Homes Barometer.
73
system for the pan-European market surveillance.
40
Graph A7.5: Public (top) and Private (bottom) R&I
investment in Energy Union R&I priorities
161
113 71
Total [mn Euro]
1% 2%
4% 8% 8%
16% 12%
28%
CCUS
14% 18%
Nuclear safety
[% per priority]
17%
14% Sustainable transport
Efficient systems
42%
38% Smart system
40%
Renewables
18%
12% 9%
2010 2014 2021
116 137 92
Total [mn Euro]
17% 21%
33%
CCUS
Nuclear safety
[% per priority]
42%
43%
26% Sustainable transport
Efficient systems
14% 9% Smart system
22%
Renewables
27% 28%
19%
2010 2014 2019
Source: JRC SETIS (2022)
41
Table A7.1:Key energy indicators
POLAND EU
2018 2019 2020 2021 2018 2019 2020 2021
Import Dependency [%] 44% 45% 43% 40% 58% 61% 57% 56%
ENERGY DEPENDENCE
of Solid fossil fuels 8% 6% 0% -4% 44% 44% 36% 37%

of Oil and petroleum products 99% 97% 97% 96% 95% 97% 97% 92%
of Natural Gas 78% 82% 78% 84% 83% 90% 84% 83%
Dependency from Russian Fossil Fuels [%]
of Hard Coal 68% 65% 74% 66% 40% 44% 49% 47%
of Crude Oil 77% 68% 72% 63% 30% 27% 26% 25%
of Natural Gas 62% 55% 55% 57% 40% 40% 38% 41%
2015 2016 2017 2018 2019 2020 2021 2022

Gross Electricity Production (GWh) 164,944 166,635 170,465 170,039 163,989 158,043 179,631 -
Combustible Fuels 151,478 151,234 152,295 154,428 145,269 137,254 156,279 -
Nuclear 0 0 0 0 0 0 0 -
Hydro 2,435 2,622 3,034 2,387 2,665 2,937 3,101 -
ELECTRICITY
Wind 10,858 12,588 14,909 12,799 15,107 15,800 16,234 -

Solar 57 124 165 300 711 1,958 3,934 -
Geothermal 0 0 0 0 0 0 0 -
Other Sources 116 67 62 125 237 94 84 -
Net Imports of Electricity (GWh) -334 1,999 2,287 5,695 10,623 13,267 888 -
As a % of electricity available for final consumption 0% 1% 2% 4% 7% 9% 1% -
Electricity Interconnection (%) - - 4.00% 3.97% 4.0% 3.9% 7.0% 6.8%
2015 2016 2017 2018 2019 2020 2021 2022

Gas Consumption (in bcm) 18.2 19.1 20.4 20.8 21.3 22.0 23.4 19.5
Gas Imports - by type (in bcm) 12.3 15.8 17.5 18.5 20.9 21.2 22.6 -
Gas imports - pipeline 12.1 14.7 15.7 15.8 17.5 17.4 18.5 -
DIVERSIFICATION OF GAS SUPPLIES
Gas imports - LNG 0.2 1.1 1.8 2.7 3.5 3.8 4.1 -
Gas Imports - by main source supplier (in bcm)* (1)
Russia 8.8 10.9 10.3 9.7 9.6 9.6 10.5 -
Qatar 0.3 2.0 3.1 4.6 4.6 4.6 4.7 -
Germany 3.2 2.7 3.6 3.0 3.9 3.7 3.3 -
United States 0.0 0.0 0.2 0.2 1.9 2.0 3.2 -
Others 0.0 0.2 0.3 1.0 0.9 1.4 0.8 -
2019 2020 2021 2022

LNG Terminals
Number of LNG Terminals (2) 1 1 1 1
LNG Storage capacity (m3 LNG) 320,000 320,000 320,000 320,000
Underground Storage
Number of storage facilities 10 10 10 10
Operational Storage Capacity (bcm) 3.5 3.7 3.7 3.7
2019 2020 2021 2022

VC investments in climate tech start-ups and scale-ups
0.0 10.3 0.9 n.a.
(EUR Mln) (3)
CLEAN ENERGY
as a % of total VC investments in Poland 0.0% 3.9% 0.2% n.a.

Research & Innovation spending in Energy Union R&i
priorites (2)
Public R&I (EUR mln) 59.7 76.9 70.5 n.a.
Public R&I (% GDP) 0.011% 0.015% 0.012% n.a.
Private R&I (EUR mln) 92.2 n.a. n.a. n.a.
Private R&I (% GDP) 0.02% n.a. n.a. n.a.
(1) The ranking of the main supliers is based on the latest available figures (for 2021)
(2) FSRU included
(3) Venture Capital investments include Venture Capital deals (all stages) and Private Equity Growth/Expansion deals (for
companies that have previously been part of the portfolio of a VC investment firm).
Source: Eurostat, Gas Infrastructure Europe (Storage and LNG Transparency Platform), JRC SETIS (2022), JRC elaboration based
on PitchBook data (06/2022)
42
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY
This Annex monitors Poland’s progress in coal and lignite mining in Poland. Total jobs in the
ensuring a fair transition towards climate environmental goods and services sector grew by
neutrality and environmental sustainability, 40.1% (to 272 537) in 2015-2019 (EU: 8.3%),
notably for workers and households in reaching 1.7% of total employment (EU: 2.2%)
vulnerable situations. To ensure a fair green (see Annex 9 for circular jobs specifically). The job
transition in line with the Council vacancy rate in construction, which is key for the
Recommendation ( 75), upskilling and reskilling green transition, is 2.1% (2022) vs 4% (2022) in
measures will promote smooth labour market the EU ( 76). Since Poland had 135 900 mining
transitions and the implementation of REPowerEU. workers out of 208 100 in the EU as a whole in
Under the recovery and resilience plan (RRP), 2021, it accounts for more than 65% of mining
crucial reforms and investments for companies in employment in the EU. The increased demand for
products, services and in the competences of fossil fuels caused by reduced imports from
employees and staff support the green transition, Russia is expected to temporarily slow the mining
complementing the territorial just transition plans industry's previously steady decline in
and actions financed by the European Social Fund employment.
Plus (ESF+). Poland is also the largest recipient of
the Just Transition Fund, which will strengthen the Upskilling and reskilling in declining and
transformation in five Polish regions. transforming sectors increased slightly and
labour shortages are relatively limited. Skills
Graph A8.1: Fair transition challenges in Poland are key for smooth labour market transitions and
preserving jobs in transforming sectors. In energy-
EU Latest PL Latest (vs EU Latest) PL 2015 (vs EU Latest)
intensive industries, workers’ participation in
GHG per worker
1.8
education and training increased from 4.3% in
1.6
1.4
2015 to 8.1% in 2022 but remains below the EU
Carbon
1.2
1 Employment EII
average (10.4% in 2022). In Poland, 41% of
citizens believe they do not have the necessary
inequality 0.8
0.6
skills to contribute to the green transition (EU:

0.4
0.2
0
38%) ( 77) (see Annex 15). To address this
Transport
Education &
challenge, specific investments under the RRP and
the Just Transition Mechanism provide training to
poverty
training EII
(proxy)
reskill workers in regions affected by the

Energy poverty transition, together with a broader training offer at
regional level and flexibility mechanisms to
Source: Eurostat, EMPL-JRC GD-AMEDI/AMEDI+ projects and encourage in-company training. The ESF+
World Inequality Database (see Table A8.1). reinforces the green transition in all 16 regional
programmes and in the national ESF+ programme
Employment in Poland’s sectors most through various interventions that promote and
affected by the green transition remains support the deployment of green skills, e.g. by
stable, while the green economy is expanding offering new curricula in schools or adapting
and workers in declining activities need training for workers. As part of the Just Transition
active support. The greenhouse gas (GHG) Fund, Silesia, which is Poland's and the EU's main
emissions intensity of Poland’s workforce fell from mining region employing the major part of Polish
21.6 to 21.4 tonnes per worker between 2015 and mining sector workers, will receive nearly EUR 200
2021, well above the EU average of 13.7 in 2021 million for green skills for adults and workers put
(see Graph A8.1 and Table A8.1). Employment in at risk by the transition.
Poland’s energy-intensive industries (EII)
represented 5.4% of total employment in 2020 While people’s ability to keep their homes
(EU average: 3.0%). Employment in mining and adequately warm has improved significantly
quarrying has decreased by 17.7% since 2015 (to in recent years until 2021, the spike in
around 189 000 workers) due to the decline of energy prices can be expected to aggravate
(75) Council Recommendation of 16 June 2022 on ensuring a fair (76) Eurostat (JVS_A_RATE_R2)
transition towards climate neutrality (2022/C 243/04) covers
employment, skills, tax-benefit and social protection (77) Special Eurobarometer 527. Fairness perceptions of the
systems, essential services and housing. green transition (May – June 2022).
43
Table A8.1:Key indicators for a fair transition in Poland
Indicator Description PL 2015 PL Latest EU Latest
GHG per worker Greenhouse gas emissions per worker - CO2 equivalent tonnes 21.6 21.4 (2021) 13.7 (2021)
Employment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20),
Employment EII 5.3 5.4 (2020) 3 (2020)
minerals (C23), metals (C24), automotive (C29) - %
Education & training EII Adult participation in education and training (last 4 weeks) in energy-intensive industries - % 4.3 8.1 (2022) 10.4 (2022)
Energy poverty Share of the total population living in a household unable to keep its home adequately warm - % 7.5 3.2 (2021) 6.9 (2021)
Transport poverty (proxy) Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport - % 28.9 36 (2023) 37.1 (2023)
Carbon inequality Average emissions per capita of top 10% of emitters vs bottom 50% of emitters 5 5 (2020) 5 (2020)
Source: Eurostat (env_ac_ainah_r2, nama_10_a64_e, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-
JRC GD-AMEDI/AMEDI+ projects and World Inequality Database (WID).
the situation again. The share of the population population, the individuals living in households
unable to keep their homes adequately warm fell with budget shares for private transport fuels ( 82)
from 7.5% in 2015 to 3.2% in 2021 ( 78). In above 6% would have increased by 7.1 pps (EU
particular, 8.2% of the population at risk of average: +5.3 pps), reaching 36.0% in January
poverty were affected in 2021 (EU: 16.4% in 2023 (EU: 37.1%) due to the increase in transport
2021), as were 2.3% of lower middle-income fuel prices. Transport fuel price increases in Poland
households (in deciles 4-5) in 2020 (EU: 8.2% in affect the upper-middle and higher incomes the
2021). Before the energy price hikes, an estimated most.
49.1% of the total population and 56.2% of the
(expenditure-based) at-risk-of-poverty (AROP) Graph A8.2: Distributional impacts of energy prices
population had residential expenditure budget due to rising energy expenditure (2021-2023) in
shares on electricity, gas, and other fuels ( 79) Poland
above 10% of their household budget (above the PL Gas PL Electricity EU Gas EU Electricity
estimated EU average of 26.9% and 48.2%, 3.0%
respectively). 2.5%
The increased energy prices in 2021-2023 2.0%
negatively affected households’ budgets. As a 1.5%
result of energy price changes during the August 1.0%
2021 to January 2023 period relative to the 18 0.5%

months prior (cf. Annex 7), in the absence of policy
support and behavioural responses (but accounting 0.0%
Electricity
Gas
Electricity
Gas
Electricity
Gas
Electricity
Gas
Electricity
Gas
Electricity
Gas
Electricity
Gas
Electricity
Gas
Electricity
Gas
Electricity
Gas
for price interventions), the share of individuals
living in households which spend more than 10% D1 D2 D3 D4 D5 D6 D7 D8 D9 D10
of their budget on energy would have increased by Mean change of energy expenditure as a percentage (%) of
8.7 percentage points (pps) for the whole total expenditure per income decile (D) due to observed price
changes (August 2021 – January 2023), without accounting
population and by 7.1 pps among the
for targeted support measures.
(expenditure-based) AROP population, less than Source: EMPL-JRC GD-AMEDI/AMEDI+ projects, based on
the EU-level increases (16.4 pps and 19.1 pps, Household Budget Survey 2015 and Eurostat inflation data
respectively) ( 80). Almost all citizens (94 %) for CP0451 and CP0452.
consider rising energy prices a serious problem ( 81).
In contrast to EU-wide patterns, the expenditure Access to public transport displays an urban-
shares would have increased almost evenly across rural divide. Citizens in Poland perceive public
income groups, in particular for gas, as shown in transport to be available (60% vs EU 55%),
Graph A8.2. Among the (expenditure-based) AROP affordable (60% vs EU 54 %) and of good quality
(66% vs EU 60%). As for these perceptions, rural
(78) Energy poverty is a multi-dimensional concept. The indicator areas outperform rural areas in the EU overall on
used focuses on an outcome of energy poverty. Further all three dimensions ( 83). The average carbon
indicators are available at the Energy Poverty Advisory Hub. footprint of the top 10% of emitters among the
(79) Products defined according to the European Classification of population in Poland is 5 times that of the bottom
Individual Consumption according to Purpose (ECOICOP):
CP045.
(80) EMPL-JRC GD-AMEDI/AMEDI+ ; see details in the related (82) ECOICOP: CP0722.
technical brief.
(83) EU (rural): 46%, 48%, 56% respectively. Special
( ) Special Eurobarometer 527.
81
Eurobarometer 527.
44
50% (see Table A8.1), and is at the same level as
the EU average. The RRP includes several
measures aimed at shifting the energy mix
towards low-carbon technologies by facilitating
the deployment of renewables and increasing the
use of alternative energy sources, reducing energy
consumption by advancing a deep renovation of
buildings, and reducing the energy intensity of
industry and services as well as households. In
Poland, the average levels of air pollution in 2020
stood above the EU average (16 vs 11.2 µg/m
PM2.5), with almost all regions exposed to critical
levels of air pollution ( 84). This has led to
significant health impacts, in particular on
vulnerable groups, and 36 530 premature deaths
annually ( 85).
(84) Double the recommendations in the WHO Air Quality

Guidelines. (annual exposure of 5µg/m3)
(85) EEA- Air Quality Health Risk Assessment
45
PRODUCTIVITY
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY
The circular economy transition is key to industrial production, (ii) sustainable consumption,
delivering on the EU’s climate and (iii) bioeconomy, (iv) new business models, and
environmental goals and provides large (v) implementation and monitoring. It sets out
socio-economic benefits. It spurs job growth, more than 40 tasks with a 4-year implementation
innovation and competitiveness and fosters timeline. Poland also had its 2022 national waste
resilience and resource security. The circularity management plan (KPGO 2022 – Krajowy plan
transition of industry, the built environment and gospodarki odpadami 2022) approved in 2016 and
agri-food can generate significant environmental amended in 2021. A plan with a more forward-
improvements (see Annex 6), as they rank among looking perspective (KPGO 2028) is being
the most resource-intensive systems. developed; adoption is expected by June 2023.
Poland’s circular economy transition is Graph A9.1: Trend in material use

insufficient and needs accelerating to meet 20.0 120.0
the EU’s circular economy goals. The EU’s 18.0
100.0
2020 circular economy action plan (CEAP) aims at 16.0
doubling circular material use by 2030 vs. 2020. 14.0

80.0
Poland’s circular material use decreased from
tonnes/capita
12.0
kg/capita
10.2% in 2016 to 9.1% in 2021, and the gap 10.0 60.0
between Poland’s performance and the EU 8.0

40.0
6.0
average of 11.7% has widened. The CEAP also
4.0
aims to significantly decrease the EU’s material 2.0
20.0
footprint. In 2020, Poland’s material footprint 0.0 0.0

(17.6 tonnes per head) was above the 2020 EU 2016 2017 2018 2019 2020 2021
average (13.7 tonnes per head). The labour market Material footprint Poland (tonnes/capita)
benefits of the circular transition have recently Material footprint EU-27 (tonnes/capita)
Trade in recyclable raw materials Poland (imports extra EU, kg/capita)
started to gain importance, with a growth rate of
Trade in recyclable raw materials EU-27 (imports extra EU, kg/capita)
2.8% in 2019. People employed in circular
economy (CE) sectors represented 10.1% of the Source: Eurostat
EU total in 2018 ( 86). As concerns health and
safety in circular jobs, fatal accidents in waste Waste treatment is starting to see
management and materials recovery are above improvements due to recent reforms. Poland
the average of all economic sectors and above the missed the 2020 EU target for recycling 50% of
EU average in Poland ( 87). municipal waste, only reaching 38.7%. Poland is at
risk of missing the 2025 EU recycling targets for
Poland has adopted a strategy to address municipal and packaging waste. In 2021, about
circular economy challenges, but more 39% of Poland’s municipal waste was still
measures are needed. In September 2019, landfilled, above the EU average (23%). Another
Poland adopted the ‘Roadmap for the transition to major challenge is the low capture rate of bio-
Circular Economy’ (CE roadmap), which contains a waste combined with insufficient recycling
set of tools, not just legislative, aiming to create capacities for separately collected bio-waste.
conditions for the implementation of a new
economic model in Poland. The proposed actions The industrial system is insufficiently
mainly concern analytical and conceptual work, circular and efficient. The economy, particularly
information and promotion, as well as coordination industry, is less efficient at using materials than
in areas within the competence of individual the EU average, with a resource productivity of 1.4
ministries. The CE roadmap is structured around purchasing power standard per kilogramme vs 2.3
the following main themes: (i) sustainable for the EU-27. There is substantial room for
improvement in Poland as regards actions
(86) European Environment Agency, 2022, Circular economy concerning industrial waste, in particular from
country profile – Poland. mining, extraction, industrial processing energy
(87) Eurostat [HSW_N2_02] for NACE Rev. 2 sector E38; 6.94
production and supply.
fatal accidents p. 100 000 employed in 2018-2020 vs 1.34
for all sectors in PL; 6.33 in the EU-27 for sector E38.
46
Graph A9.2: Treatment of municipal waste renovations of buildings are among the priorities
of the Polish recovery and resilience plan and
cohesion policy programmes for 2021-2027. As
500 stipulated in the Partnership Agreement with
Poland, solutions supporting CE are to be deployed
400
346
362 in renovation projects wherever reasonable.
329 336
307 315
Kg per capita
300 As for the agri-food system, there is

potential to increase composting and
200 digestion and to boost development of
organic farming. Poland’s composting and
100 anaerobic digestion per head has doubled since
2016, but still remains far below the EU average
0
in 2021 at 48 kg per head vs 100 kg. Increasing
2016 2017 2018 2019 2020 2021 composting could enhance Poland’s potential for
Difference waste generated/treatment producing organic fertilisers and hence support
Landfill/disposal
organic farming, which remains under-developed.
Total incineration (including energy recovery)
Composting and digestion
With 3.52% of land under organic farming, Poland
Material recycling
ranked 23rd out of 27 EU Member States in 2020.
EU-27
Source: Eurostat There remains a financing gap in the circular

economy, including waste management.
The built environment system continues to Additional investments will be required to
exacerbate the depletion of resources. The address growing needs. The financing gap was
recovery rate of construction and demolition waste estimated at EUR 789 million/year between 2014
has decreased since 2016 and remains well below and 2020. Over this period, investment needs were
the EU average (74% vs 89%). There is scope for estimated to be at least EUR 2 billion/year while
renovating existing buildings instead of investment baselines were EUR 1.2 billion/year
constructing new ones, as well as for increasing (see Annex 6).
the share of secondary raw materials used in
construction. Energy and resource efficiency
Table A9.1:Overall and systemic indicators on circularity
Latest year
AREA 2016 2017 2018 2019 2020 2021 EU-27 EU-27
Overall state of the circular economy
Material footprint (tonnes/capita) 16.7 18.1 19.0 18.6 17.6 - 13.7 2020
YoY growth in persons employed in the circular economy (%)1 0.0 -0.5 -0.9 2.8 - - 2.9 2019
Water exploitation index plus (WEI+) (%) 10.5 6.4 5.8 8.7 - - 3.6 2019
Industry
Resource productivity (purchasing power standard (PPS) per kilogram) 1.2 1.2 1.2 1.3 1.4 1.4 2.3 2021
2
Circular material use rate (%) 10.2 9.9 9.8 10.3 7.5 9.1 11.7 2021
Recycling rate (% of municipal waste) 34.8 33.8 34.3 34.1 38.7 40.3 49.6 2021
Built environment
Recovery rate from construction and demolition waste (%)3 91.0 - 84.0 - 74.0 - 89.0 2020
Soil sealing index (base year = 2006)4 108.7 - 114.2 - - - 108.3 2018
Agri-food
Food waste (kg per capita)5 - - - - 106.0 - 131.0 2020
Composting and digestion (kg per capita) 21.0 22.0 27.0 30.0 42.0 48.0 100.0 2021
(1) Persons employed in the circular economy only tracks direct jobs in selected sub-sectors of NACE codes E, C, G and S; (2) the
circular material use rate measures the share of material recovered and fed back into the economy in overall material use,
including composting and digestion; (3) the recovery rate of construction and demolition waste includes waste which is prepared
for reuse, recycled or subject to material recovery, including through backfilling operations; (4) soil sealing: 2016 column refers to
2015 data; (5) food waste includes primary production, processing and manufacturing, retail and distribution, restaurants and
food services, and households.
Source: Eurostat, European Environment Agency
47
ANNEX 10: DIGITAL TRANSFORMATION
Digital transformation is key to ensuring a basic digital skills. Also, ICT specialists account for
resilient and competitive economy. In line with a lower percentage of the workforce in Poland
the Digital Decade Policy Programme, and in than the EU average. The percentage of female
particular with the targets in that Programme for ICT specialists is also below the EU average. The
digital transformation by 2030, this Annex low share of digital specialists in the Polish
describes Poland’s performance on digital skills, workforce is exacerbated by only average rates of
digital infrastructure/connectivity and the enrolment and graduates in ICT-related studies.
digitalisation of businesses and public services. The RRP measures that aim to introduce more
Where relevant, it makes reference to progress on digital themes in education and to provide the
implementing the Recovery and Resilience Plan digital equipment in schools are expected to
(RRP). Poland allocates 21% of its total RRP contribute to increase the level of digital skills if
budget to digital (EUR 7.5 billion) ( 88). their implementation is based on sound and well
consulted strategies.
The Digital Decade Policy Programme sets
out a pathway for Europe’s successful digital Poland has a mixed performance on the
transformation by 2030. The Programme indicators for digital
provides a framework for assessing the EU’s and infrastructure/connectivity. The very high
Member States’ digital transformation, notably via capacity network (VHCN) coverage matches the EU
the Digital Economy and Society Index (DESI). It average, while overall 5G coverage is at 63%,
also provides a way for the EU and its Member considerably below the EU average. No
States to work together, including via multi- harmonised radio spectrum for 5G deployment has
country projects, to accelerate progress towards been yet assigned. For instance, the 3.4-3.8 GHz
the Digital Decade digital targets and general spectrum band, which is essential for enabling
objectives ( 89). More generally, several aspects of advanced applications requiring large spectrum
digital transformation are particularly relevant in bandwidth, is not available for providing services
the current context. In 2023, the European Year of to the citizens. The RRP includes significant
Skills, building the appropriate skillset to make full investments supporting the roll-out of connectivity
use of the opportunities that digital transformation infrastructure and as well as some relevant
offers is a priority. A digitally skilled population legislative action. Swift execution of the 5G
increases the development and adoption of digital spectrum auction is of utmost importance as it
technologies and leads to productivity gains ( 90). would enable investment, both private and also
Digital technologies, infrastructure and tools all from RRP funds. The delay in spectrum assignment
play a role in the fundamental transformation constitutes a major risk for the implementation of
needed to adapt the energy system to the current the RRP investment supporting the 5G rollout.
structural challenges ( 91).
Poland is still far below the EU average for
The low level of basic digital skills is a key most indicators on the digitalisation of
challenge for Poland in the human capital businesses. The proportion of SMEs with at least
dimension. Poland scores below the EU average a basic level of digital intensity is much lower than
on the proportion of its population with at least the EU average. The adoption of advanced digital
technologies is also considerably below the EU
average for big data solutions, cloud computing,
(88) The share of financial allocations that contribute to digital
objectives has been calculated using Annex VII of the RRF and artificial intelligence. The RRP includes several
Regulation. measures to support the adoption of digital
(89) The Digital Decade targets as measured by DESI indicators technologies by SMEs, which are expected to
and complementary data sources are integrated to the improve performance in this area.
extent currently available and/or considered particularly
relevant in the MS-specific context. Poland is still performing below the EU
(90) See for example OECD (2019): OECD Economic Outlook, average in the digital public services
Digitalisation and productivity: A story of complementarities, dimension of DESI. Poland scores below the EU
OECD Economic Outlook, Volume 2019 Issue 1 | OECD
iLibrary (oecd-ilibrary.org). average on the availability of digital public
services. Poland has two electronic identification
(91) The need and possible actions for a digitalisation of the
energy system are laid out in the Communication (eID) means notified under the Public Electronic
‘Digitalisation the energy system – EU action plan’ Identification System. The e-ID system (called
(COM(2022)552. ‘Trusted Profile’ - Profil Zaufany) is being used by
48
more than 16 million people, in particular through
the mObywatel app that provides access to a
number of public services. The same app provides
also access to the patient’s online account that is
needed for the mandatory e-prescriptions system
and enables interacting with the health system on
other administrative issues. In terms of access to
e-health records, Poland scores well above the EU
average with a score of 86 out of 100.
Table A10.1: Key Digital Decade targets monitored by DESI indicators

Digital Decade
Poland EU target by 2030
DESI 2021 DESI 2022 DESI 2023 DESI 2023 (EU)
Digital skills
At least basic digital skills NA 43% 43% 54% 80%
% individuals 2021 2021 2021 2030
ICT specialists (1) 3.4% 3.5% 3.5% 4.5% 20 million
% individuals in employment aged 15-74 2020 2021 2021 2021 2030
Digital infrastructure/connectivity
Fixed Very High Capacity Network (VHCN) coverage 65% 70% 71% 73% 100%
% households 2020 2021 2022 2022 2030
Fibre to the Premises (FTTP) coverage (2) 45% 52% 60% 56% -
% households 2020 2021 2022 2022 2030
Overall 5G coverage 10% 34% 63% 81% 100%
% populated areas 2020 2021 2022 2022 2030
5G coverage on the 3.4-3.8 GHz spectrum band NA NA 0% 41% -
% populated areas 2022 2022 2030
Digitalisation of businesses
SMEs with at least a basic level of digital intensity NA NA 61% 69% 90%
% SMEs 2022 2022 2030
3
Big data ( ) 9% 9% 9% 14% 75%
% enterprises 2020 2020 2020 2020 2030
Cloud (3) NA 19% 19% 34% 75%
% enterprises 2021 2021 2021 2030
Artificial Intelligence (3) NA 3% 3% 8% 75%
% enterprises 2021 2021 2021 2030
Digitalisation of public services
Digital public services for citizens NA 57 60 77 100
Score (0 to 100) 2021 2022 2022 2030
Digital public services for businesses NA 70 73 84 100
Score (0 to 100) 2021 2022 2022 2030
Access to e-health records NA NA 86 71 100
Score (0 to 100) 2023 2023 2030
(1) The 20 million target represents about 10% of total employment.

(2) The Fibre to the Premises coverage indicator is included separately as its evaluation will also be monitored separately and
taken into consideration when interpreting VHCN coverage data in the Digital Decade.
(3) At least 75 % of Union enterprises have taken up one or more of the following, in line with their business operations: (i) cloud
computing services; (ii) big data; (iii) artificial intelligence.
Source: Digital Economy and Society Index
49
ANNEX 11: INNOVATION
This Annex provides a general overview of the Poland’s entrepreneurial dynamism: the share of
performance of Poland’s research and innovation start-up companies in total employer enterprises
system, which is essential for delivering the twin almost doubled from 2012 (17.3%) to 2019
green and digital transition. (34.9%) and the share of employment in high-
growth enterprises in the most innovative sectors
Poland is an ‘emerging innovation was 6.7% in 2019, above the EU average of 5.5%.
performer’, slowly bridging the gap between However, the sustainability of this catching-up
its performance and the EU average. process is threatened by several major bottlenecks
According to the 2022 European Innovation in the research and innovation (R&I) ecosystem
Scoreboard ( 92), Poland has been increasing its such as a weak propensity to innovate among
innovation score continuously since 2015, though small and medium-sized enterprises (SMEs),
important progress is still needed, as its innovation emerging skills shortages and the weaknesses of
score is just 60.5% of the average EU the public science base ( 96).
performance.
Development and diffusion of innovative
Graph A11.1: R&D intensity in Poland over time technologies and solutions across the Polish
1.6
economy, in particular among SMEs, remain
1.4
very limited, hindering the green and digital
transitions. According to the Community
1.2
Innovation Survey, only 23.7% of Polish firms
1.0
reported innovation activities, one of the lowest
As % of GDP
0.8
rates in the EU. The gap between Poland and the
0.6
EU average is much bigger for SMEs than for
0.4 larger companies: In Poland only 22% of SMEs
0.2 were considered innovative in 2018, compared
0.0 with the EU average of 49%; for large companies,
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
the figures are 60.4% for Poland and 77% for the
R&D Intensity
EU average ( 97). Such a narrow innovation base
Public expenditure on R&D (Government intramural expenditure on R&D +
Higher education expenditure on R&D)
restricts the country’s capacity to perform the
Business enterprise expenditure on R&D (Business expenditure on R&D) green and digital transition. Additionally, the share
of environment-related patents is lower than the
Source: European Innovation Scoreboard, 2022 EU average.
Business R&D investment and Shortages of skills in science and engineering

entrepreneurial dynamism contribute to the limit Polish competitiveness in new
catching-up process, but several emerging technologies and innovative sectors. The
bottlenecks might impede its continuation. A number of new graduates in science and
key driver for the caching-up process is the growth engineering per thousand population aged 25 to
of R&D intensity ( 93) (1.44% of GDP in 2021) ( 94), 34 decreased significantly, from 15.9 in 2010 to
entirely due to the strong increase in business R&D 12.0 in 2020. Moreover, the Polish education
investment over the last decade (business system trains few doctorate graduates. In terms of
intensity ( 95) reached 0.91% in 2021, compared new doctorate graduates in STEM per 1000 of
with 0.19% in 2010). Several indicators highlight population, Poland’s figure is just 25.8% of the EU
average in 2022, down sharply (by 11.4%)
(92) 2022 European Innovation Scoreboard (EIS), Country profile:
compared to 2021 ( 98) ( 99).
Poland https://ec.europa.eu/assets/rtd/eis/2022/ec_rtd_eis-
country-profile-pl.pdf. The EIS provides a comparative Public research must improve qualitatively in
analysis of innovation performance in EU countries, including order to play a full role in the R&I
the relative strengths and weaknesses of their national
innovation systems (also compared to the EU average).
(96) The public science base is the research ecosystem funded by
(93) Defined as gross domestic expenditure on R&D as a
the public sector.
percentage of GDP.
(97) Source: Community Innovation Survey 2018.
(94) Source: Eurostat.
(98) Source: European Innovation Scoreboard 2022.
(95) Defined as business spending on R&D as a percentage of
GDP. (99) More information on education and skills in Annex 15.
50
Table A11.1: Key innovation indicators
EU
Poland 2010 2015 2019 2020 2021 average (1)
Key indicators
R&D intensity (GERD as % of GDP) 0.72 1.00 1.32 1.39 1.44 2.26
Public expenditure on R&D as % of GDP 0.53 0.53 0.49 0.51 0.53 0.76
Business enterprise expenditure on R&D (BERD) as % of GDP 0.19 0.47 0.83 0.87 0.91 1.49
Quality of the R&I system
Scientific publications of the country within the top 10% most cited
2.9 4.2 5.0 : : 9.8
publications worldwide as % of total publications of the country
Patent Cooperation Treaty patent applications per billion GDP (in PPS) 0.5 0.7 0.5 : : 3.3
Academia-business cooperation
Public-private scientific co-publications as % of total publications 3.3 3.9 4.9 4.9 4.9 7.1
Public expenditure on R&D financed by business enterprise (national) as

0.024 0.019 0.016 : : 0.054
% of GDP
Human capital and skills availability
New graduates in science & engineering per thousand pop. aged 25-34 15.9 16.5 13.8 12.0 : 16.0
Public support for business enterprise expenditure on R&D (BERD)
Total public sector support for BERD as % of GDP 0.030 0.082 0.170 : : 0.194
R&D tax incentives: foregone revenues as % of GDP 0 0 0.018 : : 0.100
Green innovation
Share of environment-related patents in total patent applications filed
12.1 14.4 10.3 : : 13.3
under PCT (%)
Finance for innovation and economic renewal
Venture capital (market statistics) as % of GDP 0.007 0.006 0.012 0.018 0.022 0.074
Employment in fast-growing enterprises in 50% most innovative sectors 6.3 5.8 6.7 : : 5.5
(1) EU average for the latest available year or the year with the highest number of country data.
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe
ecosystem. Science-business linkages remain With a direct budget of EUR 1.51 billion, the
limited, as shown by several indicators: both the national RRP helps tackle some of Poland’s main
share of public-private scientific co-publications as innovation challenges. The RRP includes measures
a share of all scientific publications and the level to improve science-business links, such as a
of business financing for public R&D remain well reform allowing universities and research
below the EU average. Public research’s low institutes to become shareholders in companies.
attractiveness for potential business partners Furthermore, the RRP includes a number of
reflects its weak capabilities. Both public R&D investments to modernise research infrastructure
intensity, which has stagnated at around 0.53% of in public laboratories and research institutes. The
GDP since 2010, and the quality of the public RRP also includes measures to incentivise the
science base (as measured by the share of uptake of digital technologies in the private sector,
scientific publications within the top 10% most and to support the development and diffusion of
cited publication worldwide) remain well below the breakthrough technologies, particularly in the
EU average, though the measure has been fields of the circular economy and unmanned
improving significantly, overall, since 2010 (100). aviation. Additionally, the RRP features a
EUR 273 million investment to support activities
Poland’s national recovery and resilience linked to innovation spaces such as incubators in
plan (RRP) contains measures to enhance its the biomedical sector. Spillovers in other sectors
public research capabilities, improve public- will benefit the whole Polish innovation ecosystem.
private research cooperation, and strengthen
the development and diffusion of innovative
technologies for the green and digital
transitions.
(100) Source: Science-Metrix, May 2021.
51
ANNEX 12: INDUSTRY AND SINGLE MARKET
Higher investment rates, in particular private energy and emission-intensive countries in the EU,
investment, could boost Poland’s long-term particularly in the energy and manufacturing
growth and facilitate the shift toward a sectors (over 40% of total emissions are related to
greener growth model. Poland’s investment-to- industry). Rising energy prices in 2022 are
GDP reached 17% in 2021, considerably below the affecting the competitiveness of industry,
EU average (22.5%, see Graph A12.1) and that of particularly in energy-intensive ecosystem.
peer countries (Hungary: 27.4%, Czechia: 26%).
Throughout 2022, industrial confidence indicators
Investment performance is negatively affected by have been the lowest in the EU, as managers’
a burdensome regulatory environment, the assessments of the current level of overall orders
deterioration in the legislative process that and the production trend observed in recent
increases uncertainty for investors, a low degree months keep deteriorating. During the second half
of automation and robotisation in Polish industry of 2022, some fertiliser and ceramics firms in
and skills mismatches and labour shortages (see Poland have already announced decreases in
Table A12.1) that result in rising labour unit costs. production. Although supply chain issues at times
affected the automotive industry (11% of
Moreover, in recent months high global commodity industrial production and 3.4% of GDP), Poland’s
prices and energy costs have depressed business diversified industrial base has diluted their impact.
sentiment. Poland has one of the lowest shares of Poland is also a crucial link in a supply chain for
investment in intangible assets ( 101). Delays in several critical raw materials, especially coking
delivering on the commitments in the country’s coal for steel-making processes (providing 24% of
Rrecovery and Resilience Plan, related to rule of EU supply), copper, silver and elemental sulphur.
law issues, risk a further delay in the disbursement
of Next Generation EU funds, affecting business Deterioration in governance quality
confidence, especially among foreign investors, indicators, including government
and dampening the outlook for both public and effectiveness and regulatory quality, has the
private investment growth. potential to impact growth. Polish firms report
more obstacles to climate investment than the EU
Graph A12.1: Investment, % GDP average, with uncertainty about taxation and
regulation cited most frequently ( 102). Also, the
35
perceived level of effectiveness of investment
30
protection by the law and courts is very low
25
among companies ( 103). Only 25% of companies
20
are very or fairly confident that investment will be
15 protected effectively in Poland, whereas 62% of
10 companies are either fairly unconfident or very
5 unconfident (against a 39% EU average).
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
The main reasons invoked by companies in that
PL Business PL Government respect are frequent changes in legislation or
PL Households PL Total investment
concerns about the quality of the law-making
EU-27 Total investment HU Total investment
CZ Total investment
process, as well as unpredictable, non-transparent
administrative conduct and difficulty to challenge
Source: Eurostat administrative decisions in courts. Concerns about
the quality, efficiency and independence of the
Polish industry accounts for 25.1% of total justice system also play a role in this respect.
gross value added and 22.5% of total
employment, significantly above EU averages The lack of adequate public consultation
(20% and 15.7%, respectively). As manufacturing weighs on the stability and predictability of
contributes to over 90% of exports, the long-term the business environment, substantially
competitiveness of the Polish economy is heavily lowers the quality of legislation, and hinders
dependent on reducing the emissions of the
industrial firms. Poland is still one of the most
(102) EIB, European Firms and Climate Change 2020/2021, 2021.
(101) EIB Investment Survey, Poland overview, 2022. (103) For more information please see: EU Justice Scoreboard.
52
already low investment. Significant reforms important source of financing for around 80% of
continue to be frequently adopted by by-passing Polish firms ( 106).
procedures that require adequate consultation: in
2022, 21% of the laws passed were passed using Lack of creditworthiness or lack of collateral
the alternative track and 42% of the laws passed remained the reasons for potential credit refusals
using the regular track had no documented public in approximately 55% of cases. By mid-2022, loan
consultation ( 104). growth had increased by 27.6% annually, related
to a rise in large companies’ financing needs due
This inconsistency, together with a deterioration in to fast growth in prices of commodities and
the quality of the social dialogue, is increasingly production components.
weighing on the quality of the resulting legislation
and consequently on the business environment. On the other hand, SMEs are starting to have
some financial problems, as 65% of Polish SMEs
The Polish Recovery and Resilience Plan (RRP) have experienced late payments in the last 6
includes some reforms to strengthen the role of months (see Table A12.1). Also, there was a sharp
consultations by the social partners and the role of increase in 2022 in the payment gap (the
public consultations in the legislative process, and difference between payment terms and the actual
to limit the use of fast-track procedures, with the payment) in both business and public sector
goal of having a better and more stable regulatory transactions (see Table A12.1) ( 107).
framework.
Although the number of bankruptcy declarations
Labour productivity growth has been among decreased by 28.7% in 2021 and 7.2% in 2022
the fastest in the EU for several years, but it (thanks to public support during the pandemic and
is still substantially lower than in the EU as the introduction of simplified restructuring
a whole. Nominal labour productivity per hour proceedings), the solvency of Polish firms could be
worked amounted to 66.8% of the EU average in impacted by the slowdown in Poland’s external
2022 (see Graph A12.2). This difference in labour economic environment, heightened exchange rate
productivity is not only caused by lower efficiency volatility and the lagging effects of the National
of production, but also by the lower value of the Bank of Poland interest rate hikes, constraining the
products manufactured (also, according to the availability of credit and raising its cost.
OECD, the gap between large and small firms
remains one of the largest in the EU). Graph A12.2: Nominal labour productivity per hour
worked (EU=100)
Poland’s exports are concentrated in lower value- 85
added agriculture, textiles, and metals. The size 80
structure of companies also matters for 75
productivity: in Poland, more than one-third of 70
employees work in micro companies (compared to 65
only one-fifth in Germany) and just 30% of the 60
labour force is employed in large companies with 55
more than 250 employees (41% in Germany) ( 105). 50

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Poland Czechia Hungary Slovakia

Access to finance has substantially improved
Source: Eurostat
in Poland in the last years. More than half of
firms in Poland (51%) had financed at least some
of their investment through external finance (EU Tackling structural weaknesses, including
average: 45%), with bank finance the most restrictive regulations in services and public
procurement competitiveness, would improve
productivity. Poland´s overall performance on
(104) Grant Thornton. Barometr prawa. Analiza stabilności public procurement is below the EU average:
otoczenia prawnego w polskiej gospodarce Edycja 2022, despite expectations, the new public procurement
https://barometrprawa.pl/wp-
content/uploads/2022/03/Barometr-prawa-2022-RAPORT-
law that entered into force in January 2021 did
Grant-Thornton-16-03-2022.pdf.
(106) EIB, Investment Survey, CESEE overview, 2023.
(105) World Bank, The Green Transformation in Poland, Country
Economic Memorandum, 2022. (107) 2022 European Payment Report, Intrum.
53
not immediately address the key weaknesses in
public procurement in Poland.
The public procurement system still suffers from a

low number of companies submitting tender
offers, resulting in a high share of single offers,
which has remained for years at an exceptionally
high level (52% in 2022).
Regulatory restrictiveness of regulated professions

in important business services is high in Poland,
according to the Commission’s assessment of
restrictiveness in selected professional
services ( 108). This is notably the case for
architects, civil engineers, tax advisers, lawyers
and patent agents. As regards retail, the regulatory
environment has been made stricter over the past
years with the introduction of a retail tax and a
complete ban on shops opening on Sundays ( 109).
Graph A12.3: Business environment and

productivity drivers
1) Business
investments
2) EIF access to
5) Single bids
finance index
4) Labour 3) Payment gap

shortage - G2B
4) Material 3) Payment gap

shortage - B2B
European Union Poland
Source: 1) % of GDP, 2021 Eurostat;

2) composite indicator, 2021 European Investment Fund
access to finance index;
3) average payment delay in number of days, 2022 Intrum;
4) % of firms in manufacturing facing constraints, 2022
European Commission business consumer survey;
5) proportion of contracts awarded with a single bidder, 2022
Single Market Scoreboard.
(108) COM(2021) 385 final.

(109) Retail Restrictiveness Indicator, European Commission (2022
update), forthcoming.
54
Table A12.1: Industry and Single Market
EU27
POLICY AREA INDICATOR NAME 2018 2019 2020 2021 2022
average (*)
Net private investment, level of private capital stock, net of
HEADLINE INDICATORS
5 5.6 4.4 3.9 3.9 3.7

depreciation, % GDP (1)
Economic
Net public investment, level of public capital stock, net of
Structure 2.4 2 2.1 1.8 2 0.4
depreciation, % GDP (1)
Real labour productivity per person in industry (% yoy)(2) 4.3 4.9 -0.3 1.2 6.7 1.4
Cost
competitive- Nominal unit labour cost in industry (% yoy)(2) 1.8 3.3 2.4 5.8 2.2 2.9
ness
Material shortage (industry), firms facing constraints, % (3) 13 14 7 20 30 47
Labour shortage using survey data (industry), firms facing
Shortages 67 70 61 63 63 28
constraints, % (3)
RESILIENCE
Vacancy rate (business economy)(4) 1.4 1.2 0.7 1.2 1.2 3.1
Concentration in selected raw materials, Import concentration
0.2 0.18 0.18 0.19 0.21 0.18
Strategic index based on a basket of critical raw materials (5)
dependencies
Installed renewables electricity capacity, % of total electricity
20.7 21.2 20.5 22.1 n.a. 50.9
produced (6)
Single Market
EU trade integration, % (7) 36.1 35.7 35.1 39.2 42.2 45.8
integration
MARKET
SINGLE
Restrictions EEA Services Trade Restrictiveness Index (8) 0.05 0.05 0.05 0.05 0.05 0.05
Public
Single bids, % of total contractors (9) 51 51 51 50 52 29
procurement
Investment Impact of regulation on long-term investment, % of firms
34.4 34.1 35.5 34.3 34.6 29.6
obstacles reporting business regulation as major obstacle (10)
Business Bankruptcies, Index (2015=100)(11) 79.9 78.5 71.7 51.1 47.4 86.8
BUSINESS ENVIRONMENT - SMEs
demography Business registrations, Index (2015=100) (11) 108.2 105.1 92.1 103.5 108.3 121.2
Payment gap - corporates B2B, difference in days between
5 0 17 10 17 13
offered and actual payment (12)
Payment gap - public sector, difference in days between
Late payments 7 0 20 8 21 15
offered and actual payment (12)
Share of SMEs experiencing late payments in past 6 months, %
(13) n.a. 71.8 66.3 65.5 65.2 43
EIF Access to finance index - Loan, Composite: SME external

0.81 0.65 0.69 0.65 n.a. 0.46
financing over last 6 months, index values between 0 and 1 (14)
Access to
finance
EIF Access to finance index - Equity, Composite: VC/GDP,
0.07 0.1 0.2 0.24 n.a. 0.23
IPO/GDP, SMEs using equity, index values between 0 and 1 (14)
(1) last available year

Source: (1) AMECO, (2) Eurostat, (3) ECFIN BCS, (4) Eurostat, (5) COMEXT and Commission calculations, (6) Eurostat, (7) Eurostat,
(8) OECD, (9) Single Market Scoreboard, (10) EIB survey, (11) Eurostat: (12) Intrum, (13) SAFE Survey, (14) EIF SME Access to
Finance Index
55
ANNEX 13: PUBLIC ADMINISTRATION
This Annex outlines the performance of The scope of activities of Poland’s Supreme
Poland’s public administration, which is Audit Office only covers part of the typical
essential for providing services and carrying tasks of an independent fiscal institution. For
out reforms. Overall, administrative example, it does not cover macroeconomic or
effectiveness in Poland continues to rank budgetary forecasting. Its performance on the
significantly below the EU average ( 110). The national medium-term budgetary framework, and
downward trend may be linked to increasing levels the strength of its fiscal rules indices, are clearly
of politicisation in the senior civil service and to below the EU average.
the restructuring of the judiciary ( 111).
Poland continues to score below the EU
Poland’s performance on regulatory average on digital public administration
governance is around the EU average (Graph (Graph A13.1 and Annex 10). The gaps concern the
A13.2). Recent changes aimed to strengthen public availability of public services for citizens and
consultations and impact assessments for businesses that may be completed online ( 114).
government policy proposals. The implementation Digitalisation remains one of the key priorities of
of these requirements, however, is rather the government, with more than 21% of measures
formalistic, and their added value is diminished by in Poland’s recovery and resilience plan
over-regulation and frequent changes to contributing to the digital transition. These
legislation. Almost 60% of local government measures are expected to improve the delivery of
officials give a poor assessment of the quality of public services and speed up the digitalisation of
law and its impact on the functioning of local the public administration.
government. Just 5% consider it to be of good
quality. The vast majority claim that they have Graph A13.1: Poland. E-government maturity and
difficulties in implementing legal changes in their e-government users
offices ( 112). Parliament, which initiated about 21%
100
of the laws passed between 2017 and 2020, does
90
not apply the regulatory requirement set for the
80
public administration ( 113). The Polish recovery and 70
resilience plan contains a set of actions to further 60
improve the law-making process and expand the 50
public’s input. 40
30
The Polish civil service is among the 20
youngest in the EU. The share of public 10
administration employees with higher education is 0
among the highest (Poland: 70.5%, EU-27: 52%). centricity
Key enablers
User Transparency Cross-border Total
services
The negative trend in gender parity in senior civil E-govt.
service positions is getting worse, with the E-government maturity users
absolute difference between the share of men and PL EU-27
women rising from 1.8% in 2017 to 12% in 2022.
(1) 2022 data for the e-government maturity indicator and
2021 data for the e-government users indicator.
Source: E-government benchmark report and Eurostat
(110) Worldwide Governance Indicators, 2021.
The judicial system faces challenges to its
(111) Mazur S., Możdżeń M. and Oramus M. (2018). ‘The
Instrumental and Ideological Politicisation of Senior Positions independence. The overall performance of
in Poland’s Civil Service and its Selected Consequences’. ordinary and administrative courts remains
NISPAcee Journal of Public Administration and Policy, Vol.11 stable ( 115). In ordinary courts, while the time
(Issue 1), pp. 63-89.
(112) ‘Legal and local government LEXOMETR 2022. Local (114) Digital Economy and Society Index 2022 (https://digital-
government units in the era of crises’ strategy.ec.europa.eu/en/policies/countries-digitisation-
(https://www.wolterskluwer.com/pl- performance).
pl/solutions/informacje/lexometr-prawno-samorzadowy-
2022). (115) For a more detailed analysis of the performance of the
justice system in Poland, see the 2023 EU Justice
(113) OECD, 2022, Better Regulation Practices across the European Scoreboard (forthcoming) and the country chapter for Poland
Union 2022 in the 2023 Rule of Law Report (forthcoming).
56
Table A13.1: Public administration indicators
PL Indicator (1) 2017 2018 2019 2020 2021 2022 EU-27(2)

E-government and open government data
Share of individuals who used the internet within the last year to
1 39.5 44.8 49.3 49.5 54.7 n/a 64.8
interact with public authorities (%)
2 E-government benchmark overall score (3) n/a n/a n/a 58.0 54.9 62.2 72.9
3 Open data and portal maturity index n/a 0.7 0.8 0.9 1.0 1.0 0.8
Educational attainment level, adult learning, gender parity and ageing

Share of public administration employees with tertiary education
4 67.0 67.6 67.9 69.4 70.0 (b) 70.5 52.0
(levels 5-8, %)
Participation rate of public administration employees in adult
5 7.3 11.4 (b) 8.5 7.0 13.1 (b) 18.8 16.9
learning (%)
6 Gender parity in senior civil service positions (4) 1.8 4.8 9.6 9.6 9.6 12.0 11.0
7 Ratio of 25-49 to 50-64 year olds in NACE sector O 3.1 3.1 3.2 3.1 3.1 (b) 3.1 1.5
Public financial management
8 Medium term budgetary framework index 0.5 0.5 0.5 0.4 0.4 n/a 0.7
9 Strength of fiscal rules index 1.2 1.2 1.2 1.2 1.3 n/a 1.5
Evidence-based policy making
10 Regulatory governance 1.72 n/a n/a n/a 1.76 n/a 1.7
( ) High values denote a good performance, except for indicator # 6. ( ) 2022 value. If not available, the 2021 value is shown.
1 2
(3) Measures the user centricity and transparency of digital public services as well as the existence of key enablers for the
provision of those services. (4) Defined as the absolute value of the difference between the percentage of men and women in
senior civil service positions. Flags: (b) break in time series; (d) definition differs; (u) low reliability.
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Labour Force
Survey, Eurostat (# 4, 5, 7), European Institute for Gender Equality (# 6); Fiscal Governance Database (# 8, 9); OECD Indicators of
Regulatory Policy and Governance (# 10).
needed to resolve civil, commercial, administrative availability of electronic communication tools in

and other cases fell from 110 days in 2020 to the prosecution service. Serious concerns
107 days in 2021, an opposite trend is seen in regarding judicial independence persist as
litigious civil and commercial cases, with an underlined in the Commission’s Rule of Law
increase from 317 days on average in 2020 to Reports. Poland also committed to milestones
330 days in 2021. The overall quality of the related to the independence of the judiciary in its
justice system is good, and the level of recovery and resilience plan.
digitalisation is advanced. Gaps remain in online
access to published judgments and in the
Graph A13.2: Poland. a) Regulatory impact assessment, b) Stakeholder engagement and c) Ex post
evaluation of legislation
a) Regulatory impact assessment b) Stakeholder engagement c) Ex-post evaluation of legislation
3 3.003 3.003 3.00
2.5 2.50
2.5 2.5
2.50 2.50
2 2.002 2.002 2.00
1.5 1.5
1.50 1.50
1.5 1.50
1 1.001 1.001 1.00
0.5 0.5
0.50 0.50
0.5 0.50
0 0.000 0.000 0.00

PL2017 PL2021 PL2017 PL2021 PL2017 PL2021 PL2017 PL2021 PL2017 PL2021 PL2017 PL2021
Primary laws Secondary laws Primary laws Secondary laws Primary laws Secondary laws
Methodology Oversight Methodology Oversight Methodology Oversight
Systematic adoption Transparency Systematic adoption Transparency Systematic adoption Transparency
EU-27 EU-27 EU-27
Source: Indicators of Regulatory Policy and Governance Surveys 2017 and 2021, (http://oe.cd/ireg).
57
FAIRNESS
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF
THE EUROPEAN PILLAR OF SOCIAL RIGHTS
The European Pillar of Social Rights is the compass average of 74.9%. The unemployment rate
for upward convergence towards better working decreased by 0.5 percentage points (pps) between
and living conditions in the EU. This Annex provides 2021 and 2022to 2.9% and remains one of the
an overview of Poland’s progress in implementing lowest in the EU (EU: 5.9%) ( 116). The high
the Pillar’s 20 principles and EU headline and proportion of temporary contracts continues to be
national targets for 2030 on employment, skills a challenge for the Polish labour market, with the
and poverty reduction. share still higher than the EU average (14.9% vs
13.5% in Q4-2022 for people aged 15-64) and
Table A14.1: Social Scoreboard for Poland over one third of young people (aged 15-29) under
such contracts in Q4-2022 (34.2%, which was in
Policy area Headline indicator
line with the EU average of 34.6%) ( 117). At 13%,
Early leavers from education and training
(% of population aged 18-24, 2022)
4.8
the coverage of collective bargaining is one of the
Share of individuals who have basic or above basic overall
digital skills (% of population aged 16-74, 2021)
42.93 lowest in the EU ( 118). Social dialogue remains
Equal opportunities
and access to the
Youth NEET rate
10.9
unbalanced, with insufficient quality of
labour market
Gender employment gap
involvement of social partners in consultations of
(percentage points, 2022)
12.9
legal acts. Poland reported the highest number of
Income quintile ratio
(S80/S20, 2021)
4.03 displaced people from Ukraine in the EU with 1.5
Employment rate
76.7
million ( 119) registered. Around 200 000 of them
Unemployment rate
are working at present; this is about 30% of the
Dynamic labour 2.9
markets and fair
(% of active population aged 15-74, 2022) working-age Ukrainians who have arrived (mostly
Long term unemployment
working conditions
(% of active population aged 15-74, 2022)
0.9 women).
GDHI per capita growth
146.35
(2008=100, 2021)
At risk of poverty or social exclusion rate
Persons with disabilities, women and
16.8
(% of total population, 2021)
vulnerable groups continue to face obstacles
At risk of poverty or social exclusion rate for children
16.5
to labour market participation. At 34.2 pps, the
Impact of social transfers (other than pensions) on poverty
reduction (% reduction of AROP, 2021)
35.65 disability employment gap is one of the highest in
Social protection Disability employment gap
34.2
the EU (EU average: 23 pps) and has been showing
and inclusion (percentage points, 2021)
Housing cost overburden
an increasing trend in recent years. The activity
5.7
(% of total population, 2021) rate of persons with disabilities (around 50%) is
Children aged less than 3 years in formal childcare
(% of population under 3-years-old, 2021)
17.2 on the rise, but still well below the EU average of
Self-reported unmet need for medical care
(% of population 16+, 2021)
2.7 61.6% (120). The employment rate for women aged
Critical
situation
To watch
Weak but
improving
Good but to
monitor
On average Better than average Best performers 20-64 continued to grow, and in 2021, it was
Update of 27 April 2023. Members States are classified on
higher than the EU average for the first time since
the Social Scoreboard according to a statistical methodology 2012 (68.4% vs 67.7% in the EU) and it rose
agreed with the EMCO and SPC Committees. It looks jointly at further to 70.2% in 2022. However, the gender
levels and changes of the indicators in comparison with the employment gap (12.9 pps in 2022) remains
respective EU averages and classifies Member States in seven above the EU average of 10.6 pps. This gap is
categories. For methodological details, please consult the
Joint Employment Report 2023. Due to changes in the mainly due to the low employment rate of women
definition of the individuals' level of digital skills in 2021, aged 55-64 (44.6% vs 56.3% in the EU in
exceptionally only levels are used in the assessment of this 2022) ( 121). This is largely a result of the different
indicator.
NEET: neither in employment nor in education and training;
GDHI: gross disposable household income. (116) Source: Eurostat, online data codes: LFSI_EMP_Q, and
Source: Eurostat UNE_RT_Q
(117) Source: Eurostat, online data code: LFSQ_ETPGA
The Polish labour market made a robust (118) OECD and AIAS (2021), Institutional Characteristics of Trade
recovery in 2022, but some challenges Unions, Wage Setting, State Intervention and Social Pacts,
persist, including risks stemming from OECD Publishing, Paris, OECD/AIAS ICTWSS database - OECD.
Russia’s war of aggression against Ukraine. (119) Social Insurance Institution (ZUS) data as of January 2023.
The employment rate of people aged 20-64 (120) European comparative data on Europe 2020 and persons
recovered from the COVID-19 crisis, reaching a with disabilities - Publications Office of the EU (europa.eu)
record high of 76.7% in 2022, above the EU (121) Source: Eurostat, online data code: LFSI_EMP_A
58
statutory retirement ages for men (65 years) and past 4 weeks) is still far below the EU average of
women (60 years). The participation of children 10.8% despite its increase from 4.8% to 5.4%
aged less than 3 years in formal childcare is much between 2019-2021. The RRP and the ESF+ will
lower than the EU average (17.2% vs 36.2% in the support training measures to strengthen the green
EU). However, since 2020 the rate has increased and digital transitions.
by 6 pps, mainly thanks to EU funding. In Poland,
76% of crèches are private, which results in high Table A14.2: Situation of Poland on 2030
costs for parents ( 122). The social allowances employment, skills and poverty reduction targets
system for caregivers of persons with disabilities National EU
Latest Trend
prevents carers from working (while being Indicators
data (2015-2022)
target by target
insufficient to avert the risk of poverty). In 2022, 2030 by 2030
76.7
the share of Polish young people not in education, Employment (%)
(2022)
78 78
employment or training (NEET) (10.9%) was 1

Adult learning (%)
20.9
52 60
(2016)
slightly below the EU average (11.7%) ( 123). Youth 2
-283
Poverty reduction
unemployment remains low (6.8% vs 11.3% in the (thousands) (2021)
-1 500 -15 000
EU in 2022 in the age group 15-29) ( 124), reflecting (1) Adult Education Survey, adults in learning in the past 12
the fact that the number of economically inactive months.
young people within the NEET group has been (2) Number of persons at risk of poverty or social exclusion
(AROPE), reference year 2019.
increasing. The employment rate of older workers,
Source: Eurostat, DG EMPL.
especially those with low skills, lags behind the EU
average. In Poland, older people aged 55 to 64
make up more than 32% of the economically Poland is experiencing an increase in labour
inactive working-age population (15-64 yrs, shortages and skills mismatches. Labour
2021) ( 125). The European Social Fund Plus (ESF+) shortages as reported by employers increased
will support measures to improve access to rapidly during the post-pandemic recovery and
employment, particularly for young people, reached levels that are comparatively high in the
women, older people, long-term unemployed EU, yet do not exceed pre-pandemic levels. On
people and other disadvantaged groups. Several of average, in 2021 81% of employers had
the country’s recovery and resilience plan (RRP) difficulties filling open positions ( 126) and 91% of
reforms are expected to be adopted in 2023 to companies reported skills shortages, however 73%
improve labour market participation and admitted that they do not invest in skills ( 127) . In
strengthen public employment services. 2022, shortages started to taper off, while in Q4-
Addressing these challenges would support 2022, 36% of employers in industry, 25% in
progress towards the national employment rate services and 31% in construction still stated that
target of 78.3% by 2030. the availability of labour was a factor that limited
production. Macroeconomic skills mismatches
The low level of individuals’ digital skills and improved in the last decade due to the increase in
low adult learning participation remain the average skills level of the working-age
challenges to be tackled, which is also population. In the 2021-2027 period, the ESF+ will
necessary for the green and digital support flexible upskilling and reskilling
transitions. Digital skills have improved in recent opportunities. These measures will contribute to
reaching the national target of having at least
years, but, as shown in the EU Digital Economy
51.7% of all adults participating in education and
and Society Index (EU DESI), Poland is one of the
training every year by 2030.
EU countries with the lowest performance in terms
of digital skills. Only 43% of people had at least
Social indicators in Poland are still broadly
basic digital skills in 2021, compared to 54% in
the EU. Adult participation in learning (over the stable, but some challenges remain. In 2021,
(126) ManpowerGroup Employment Outlook Survey Q3 2021

(122) https://stat.gov.pl/obszary-tematyczne/dzieci-i- Poland Results.
rodzina/dzieci/zlobki-i-kluby-dzieciece-w-2020-roku,3.8.html
(127) Dębkowska, K., Kłosiewicz-Górecka, U., Szymańska, A.,
(123) https://ec.europa.eu/eurostat/web/european-pillar-of-social- Ważniewski, P., Zybertowicz, K. (2022), Kompetencje
rights/indicators/social-scoreboard-indicators pracowników dziś i jutro, Polski Instytut Ekonomiczny,
(124) Source: Eurostat, online data code: UNE_RT_A Warszawa, https://pie.net.pl/wp-
content/uploads/2022/04/Kompetencje-pracow-20.07.2022-
(125) Source: Eurostat, online data code: LFSA_IGAN kopia.pdf
59
the share of people at risk of poverty or social
exclusion in the total population (16.8%) and
children (16.5%) stood below the EU averages.
However, the at-risk-of-poverty rate is much
higher for people in non-standard forms of work
(15.8%) than in standard forms of work (4.1%).
Material and social deprivation is the highest
among part-time workers and self-employed
people (14.3% vs 10.6% in the EU). Older people
are at a slightly higher risk of poverty, especially
women (22.1% vs 13.2% for older men). A fast
ageing population, combined with the low
statutory and effective retirement age, will likely
cause pension benefits to decrease, raising
concerns on pension adequacy, especially for
women. Further social policy action would help
Poland reach the national target of having at least
1.5 million fewer people at risk of poverty by
2030.
The long-term care (LTC) system is

inadequate to meet the needs of the ageing
population. Quality and access to professional
LTC remains very limited. The share of population
aged 65 and over with LTC needs exceeds the EU
average (35.9% vs 26.6% in the EU in 2019). The
unmet needs for LTC are also high, with 46.7% of
people aged 65 and over reporting a lack of
assistance in personal care or household activities.
Only 18.8% of the population aged 65 and over
with LTC needs use home-care services, compared
to 28.6% in the EU in 2019. Publicly provided or
funded home-care services for the population
aged 65 and over are also below the EU average
(3.4% vs 5.8% in the EU in 2019). LTC quality
assurance is fragmented between the healthcare
and social sectors. Public spending on LTC is
among the lowest in the EU (0.8% vs 1.7% in the
EU in 2019). Workforce levels and salaries are also
low. In 2019, there were only 0.6 LTC workers per
100 people aged 65 and over (OECD-32 average:
5.2). Poland has a very low number of LTC beds
per 100 000 inhabitants (194.4). The ESF+ will
finance training, psychological help and respite
care for informal carers and support the provision
of home and community-based LTC. There is a
further need to assess working conditions, skills
requirements, and challenges facing informal
carers.
60
ANNEX 15: EDUCATION AND TRAINING
This Annex outlines the main challenges for leads to reduced investments in both educational
Poland’s education and training system in light of infrastructure and extracurricular activities. The
the EU-level targets and other contextual central government subsidy for education is
indicators under the European Education Area increasing more slowly than education
strategic framework, based on the 2022 Education expenditure: in 2021, local governments covered
and Training Monitor. almost 46% of spending on ECEC and school
education, in contrast to 2012, when it was around
Teacher shortages are a major challenge ( 128). 20% (133). Teacher minimum statutory salary
The teaching profession has faced many increases in 2022 and 2023 (by 7.8% from
challenges over the past years, leading to teacher January) did not cover the increased cost of living
demotivation and shortages although the number and are below the growth in wages in the private
of students was also falling prior to 2022 due to sector. The Supreme Audit recommended carrying
demographic trends. National statistics ( 129) out an in-depth analysis of the problems and
confirm shortages in many counties, mainly in developing a comprehensive approach to address
large cities, and among teachers of vocational teacher supply issues and the needs of local
education and training (VET), early childhood governments in financing education.
education and care (ECEC), science, technology
engineering and mathematics (STEM), and foreign Participation of children in ECEC continues to
languages, and teachers with a background in increase, but some provision gaps persist. In
special needs education. Teacher salaries in Poland 2020, the rate reached 90.8%, up by 0.5 pps from
are among the lowest in the EU, in particular those 2019. The participation of 3-year-olds (78.5%) is
of beginner teachers ( 130), ( 131), and are not still below the EU average. The rate continues to
attractive to young graduates in Poland. Around be low in rural areas, where provision has been
40% of teachers are 50 or older, while the insufficient, and in some regions (Warminsko-
proportion of those below 30 ranges from less Mazurskie, Kujawsko-Pomorskie).
than 5% to 6%.
School education is facing multiple
Graph A15.1: Age profile of teachers in Poland challenges, affecting the educational process
and deepening inequalities. The Supreme Audit
primary found negative impacts of remote teaching during
secondary
the pandemic on the educational process, leading
to deepened inequalities, learning losses, and a
tertiary deterioration in student and teacher well-
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% being ( 134). In addition to the challenges related to
the implementation of the 2016 reform, upper
under 30 30-39 years 40-49 years 50 and over
secondary schools, mainly in cities, struggle with
Source: OECD statistics overcrowding due to an increased cohort, by
around 50%, of primary school graduates in
Local governments face difficulties in 2022/23. Also in 2022/23, almost 188.000
financing educational tasks, the major share displaced children from Ukraine are enrolled in
of which constitute teacher salaries ( 132). This kindergartens and schools, however, still around
55% of school-aged children from Ukraine remain
outside the Polish schooling system.
(128) Supreme Audit (2022) Financing education by local Stakeholders and the Ombudsman ( ) indicate a
135
governments. https://www.nik.gov.pl/aktualnosci/edukacja-i-
nauka/wciaz-za-malo-pieniedzy-na-szkoly-i-
przedszkola.html
(129) https://barometrzawodow.pl/en/module/forecasts-on-maps;. (133) https://stat.gov.pl/en/topics/education/education/education-
in-the-20212022-school-year,1,18.html
(130) European Commission/EACEA/Eurydice, 2021. Teachers' and
(134) Supreme Audit (2022), Schools in pandemic times.
School Heads' Salaries and Allowances in Europe – 2019/20.
https://www.nik.gov.pl/aktualnosci/edukacja-i-nauka/szkoly-
(131) OECD (2022), Education at a Glance 2022: OECD indicators. w-czasach-pandemii.html
https://doi.org/10.1787/3197152b-en
(135) Centre for Civic Education, 2022. https://ceo.org.pl/wp-
(132) Supreme Audit (2022), Financing education by local content/uploads/2022/11/CEO_uczniowie_uchodzczy_pazdzi
governments. https://www.nik.gov.pl/aktualnosci/edukacja-i- ernik_2022-fin-1.pdf; The Ombudsman, 2022.
nauka/wciaz-za-malo-pieniedzy-na-szkoly-i- https://bip.brpo.gov.pl/pl/content/rpo-edukacja-ukraina-dzieci-
przedszkola.html rekomendacje-mein-odpowiedz
61
Table A15.1:EU-level targets and other contextual indicators under the European Education Area
strategic framework
2015 2022
Indicator Target Poland EU27 Poland EU27
1 2020 2020
Participation in early childhood education (age 3+) 96% 84.3% 91.9% 90.8% 93.0%
2018 2018
Reading < 15% 14.4% 20.0% 14.7% 22.5%
2 2018 2018
Low achieving 15-year-olds in: Mathematics < 15% 17.2% 22.3% 14.7% 22.9%
2018 2018
Science < 15% 16.3% 21.1% 13.8% 22.3%
3
Total < 9% 5.3% 11.0% 4.8% 9.6%
3
Men 7.2% 12.5% 5.7% 11.1%
By gender
Women 3.2% 9.4% 3.7% 8.0%
4
Cities 4.5% 9.6% 4.7% 8.6%
Early leavers from education and training (age 18-24) By degree of urbanisation
Rural areas 6.1% 12.2% 4.7% 10.0%
Native 5.3% 10.0% 4.8% 8.3%
5 u u
By country of birth EU-born : 20.7% : 20.3%
u u
Non EU-born : 23.4% : 22.1%
6 2018 2018
Equity indicator (percentage points) : : 10.6 19.3
7
Exposure of VET graduates to work based learning Total ≥ 60% (2025) : : 16.4% 60.1%
8
Total 45% 43.2% 36.5% 40.5% 42.0%
8
Men 34.0% 31.2% 31.2% 36.5%
By gender
Women 52.8% 41.8% 50.1% 47.6%
9
Cities 58.2% 46.2% 58.1% 52.2%
Tertiary educational attainment (age 25-34) By degree of urbanisation
Rural areas 30.0% 26.9% 28.0% 30.2%
Native 43.1% 37.7% 40.2% 43.0%
10 u u
By country of birth EU-born : 32.7% : 39.5%
u
Non EU-born 66.9% 27.0% 60.7% 35.7%
11 2020 2020
Share of school teachers (ISCED 1-3) who are 50 years or over 29.0% 38.3% 37.2% 39.2%
Source: (1,3,4,5,7,8,9,10,11) = Eurostat; 2 = OECD (PISA); 6 = European Commission (Joint Research Centre). Notes: Data is not
yet available for the remaining EU-level targets under the European Education Area strategic framework, covering
underachievement in digital skills and participation of adults in learning. The equity indicator shows the gap in the share of
underachievement in reading, mathematics and science (combined) among 15-year-olds between the lowest and highest quarters
of socio-economic status.
need for better systemic solutions, in particular than for the more experienced institutions ( 137),
support for teachers. which questions the evaluation process
reliability ( 138).
Poland’s tertiary educational attainment
rate has dropped below the EU average; the Poland plans to develop a digital strategy for
higher education institutions (HEI) evaluation schools and digital competences; higher
process needs improvement. In 2022, the education is not digital-ready. A digital divide
tertiary educational attainment rate of people among students and teachers continues, and
aged 25-34 was 40.5% (EU 42%), similar to 2021 teachers still lack training in digital teaching
(40.6%), but lower by 1.9 pps compared with 2020 methods ( 139). In its recovery and resilience plan,
and 3 pps compared with 2019. The reasons for Poland adopted a national digital competence
the decrease are not clear. In 2020, the proportion programme, including training of teachers, and, for
of STEM graduates fell to 19.4% (EU 24.9%). The schools, it plans to develop a digitalisation
proportion of graduates in natural sciences, maths strategy and minimum standards for ICT
and statistics is particularly low at 3.2% (EU 6.2%), equipment. However, HEIs also lack sufficient ICT
and that of ICT graduates is slightly below the EU infrastructure and skills for online teaching and
average (3.7% vs 3.9%); this is expected to hinder
the research and innovation potential of
Poland ( 136). The first evaluation of HEIs resulted in (137) https://serwisy.gazetaprawna.pl/edukacja/arty
disproportionally better results for small HEIs in a kuly/8511517,edukacja-uczelnie-ewaluacja-zastrzezenia-
ocena-dzialalnosci.html
specific discipline, or those with new faculties,
(138) https://oko.press/ewaluacja-nauki-to-porazka-jej-wyniki-nic-
nie-mowia-i-nikomu-nie-sa-potrzebne-wywiad/
(139) Supreme Audit (2022), Schools in pandemic times.
https://www.nik.gov.pl/aktualnosci/edukacja-i-nauka/szkoly-
(136) For more information, see Annex 11, innovation. w-czasach-pandemii.html
62
working, and a concept for developing and using
digital educational materials in HEIs ( 140).
(140) Supreme Audit (2022), Digital Poland? A long way to go.

https://www.nik.gov.pl/aktualnosci/kompetencje-cyfrowe.html
63
ANNEX 16: HEALTH AND HEALTH SYSTEMS
A healthy population and an effective, EU countries in which the share of preventive care
accessible and resilient health system are in total healthcare expenditure decreased between
prerequisites for a sustainable economy and 2019 (2.1%) and 2020 (1.9%). Across the EU,
society. This Annex provides a snapshot of overall spending on prevention increased by 26%
population health and the health system in Poland. on average, mostly driven by spending on disease
detection, surveillance, control and response
Life expectancy in Poland is among the programmes as part of the public health response
lowest in the EU and in 2021, it fell back to to COVID-19.
the level of 13 years earlier. This reflects the
The public share of health spending is
increase in COVID-19 mortality in 2021, (more
than a doubling compered to 2020 (141)). Mortality comparatively low (72.3% in 2020 versus
per 100 000 population from preventable causes 81.2% for the EU overall). Household out-of-
(deaths that can be mainly avoided through public pocket payments are relatively high (19.6%,
health and primary prevention measures) (222, versus 14.4% for the EU overall). Public spending
versus 160 for the EU overall) and treatable on health is projected to increase by 2.6 pps of
causes (144, versus 92 for the EU overall) is GDP by 2070 (compared to 0.9 pps for the EU
higher than the EU average. Diseases of the overall), due to demographic pressures and a
circulatory system and cancer were the main substantial increase in public spending from 4.9%
causes of death before the pandemic, but COVID- of GDP in 2019 to 6.0% in 2025 (see Annex 21).
19 has accounted for a substantial share of
deaths in recent years. Graph A16.2: Projected increase in public
expenditure on healthcare over 2019-2070
Graph A16.1: Life expectancy at birth, years
80.9 80.9 81.0 81.3

80.4 80.1
Poland 4.9 2.6 2019
78.0 77.8 77.7 78.0
76.5
75.5 2070
EU 6.6 0.9 increase
2016 2017 2018 2019 2020 2021 0 2 4 6 8

Poland EU % of GDP
Source: Eurostat AWG reference scenario

Source: European Commission / EPC (2021)
Health spending relative to GDP in Poland is
among the lowest in the EU. This said, in 2020,
total healthcare spending increased to 6.5% of
GDP. This is in line with the upward trend in all
Member States in 2020. In Poland, this increase is
fully explained by the GDP contraction observed
(by 2%, compared to 5.7% in the EU overall), as
nominal annual healthcare spending moderately
decreased from EUR 34.4 billion to EUR 34.1
billion. This is also corroborated by the fact that,
as a share of total public spending, health
spending decreased by 0.6 percentage points
(pps).
Spending on prevention decreased, bucking a

trend for increasing budgets observed in all
other Member States. Poland is one of the few
(141) Based on data provided directly by Member States to ECDC

under the European Surveillance System (data current as of
13 April 2023)
64
Table A16.1: Key health indicators
EU average
2017 2018 2019 2020 2021
(latest year)
Treatable mortality per 100 000 population (mortality avoidable through optimal
132.0 133.1 133.7 144.2 NA 91.7 (2020)
quality healthcare)
Cancer mortality per 100 000 population 290.5 291.2 283.4 279.7 NA 242.2 (2020)
Current expenditure on health, % GDP 6.6 6.3 6.5 6.5 NA 10.9 (2020)
Public share of health expenditure, % of current health expenditure 69.3 71.5 71.8 72.3 NA 81.2 (2020)
Spending on prevention, % of current health expenditure 2.4 2.3 2.1 1.9 NA 3.4 (2020)
Acute care beds per 100 000 population 485 473 435 437 NA 387.4 (2019)
Doctors per 1 000 population * 2.4 NA NA NA NA 3.9 (2020)
Nurses per 1 000 population * 5.1 NA NA NA NA 8.3 (2020)
Consumption of antibacterials for systemic use in the community, daily defined
23.8 23.0 22.2 17.1 18.8 14.5 (2021)
dose per 1 000 inhabitants per day (total consumption in CY and CZ) **
Note: The EU average is weighted for all indicators, except for (*) and (**), for which the EU simple average is used. The simple
average for (*) uses data for 2020 or most recent year if former not available. Doctors' density data refer to practising doctors in
all countries except EL, PT (licensed to practice) and SK (professionally active). Nurses' density data refer to practising nurses in all
countries except FR, PT, SK (professionally active) and EL (nurses working in hospitals only).
Source: Eurostat; except: ** ECDC
Poland has the lowest number of doctors and Under the loan component, Poland is proposing
nurses in the EU (per 1 000 population), with two reforms (with two subsequent investments).
an ever-increasing share of health staff in The first reform is to support the transformation
the higher age brackets. According to the of district hospitals into long-term care and
National Statistical Office, in 2021, the number of geriatric care units or centres. The second reform
doctors and nurses licensed to practice, increased is to introduce a regulatory framework to help
in absolute terms compared to the previous year, attract the production of medicines and active
by 4 063 and 5 300, respectively ( 142). In 2021, all pharmaceutical substances to Poland and increase
age groups of doctors saw a nominal increase in this production.
numbers except the group of 40-49 years. As in
previous years, those aged between 50 and 59 Costly hospital care accounts for a
were the most numerous group (almost 32 000), disproportionate share in total expenditure,
accounting for 20.6% of the total number of with a weak primary care system and high
doctors licensed to practice (21.1% in 2020). On a unmet health needs. In 2020, there was a
positive note, with a difference of 3 300, the decrease in the number of outpatient clinics and a
highest increase occurred in those aged up to 29 decrease in the number of medical practices that
years. In 2021, this group accounted for 11.7% of provided advice under a contract signed directly
the total of doctors licensed to practice, up from with the Narodowy Fundusz Zdrowia (the national
9.8% the previous year. In 2021, the number of health fund). There were 44 million (15%) fewer
nurses of doctors licensed to practice increased by visits than in the previous year ( 143). However,
5 300 to 305 800, with 61% being over 50 years actions are being taken to strengthen the role of
old. primary care in the health care system. In October
2022, regulations introducing coordinated care for
Under the Recovery and Resilience Facility, the most common diseases and improving access
Poland is using both grants and loans for to a specialist doctor came into force.
investments in health, worth a total of EUR
4.2 billion (12% of the total budget). Under The low proportion of hospitals that use electronic
the grant component, Poland is proposing three health records (10%) and the low proportion of
reforms (with four subsequent investments). The primary care centres (30%) further hamper the
first reform introduces comprehensive measures integration of care provision.
to restructure public hospitals. The second reform
improves the match between needs and
availability of medical professionals in Poland. The
third reform improves the quality and efficiency of
the healthcare system by supporting research and
development in the medical and health fields.
(142) See: Statistics Poland / Topics / Health / Health / (143) See: Statistics Poland / Topics / Health / Health / Outpatient
Outpatient health care in 2021. health care in 2021.
65
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL
This Annex showcases the economic and Świętokrzyskie, Warmińsko-Mazurskie,

social regional dynamics in Poland providing Podkarpackie and Podlaskie ( 147)).
an update on the economic, social and territorial
cohesion in the Polish regions compared with the Map A17.1: Poland GDP per capita (PPS) by NUTS 2
EU as a whole and the main regional economic region, 2020
recovery challenges.
Regional disparities in Poland have remained

high in last years. However, convergence on the
EU average has continued. Internal convergence in
2011-2020 was hampered by the relatively
sluggish growth in the less developed regions ( 144).
At the extreme, the average annual real GDP per
capita growth rate was lowest in Świętokrzyskie,
Warmińsko-Mazurskie and Lubuskie all below
2.9% of the country average ( 145) (Graph A17.1),
but convergence on the EU average has
continued ( 146). All Poland's regions had a higher
average annual real GDP per capita increase than
the EU as a whole.
Graph A17.1: GDP (PPS) per capita (2010) and GDP

growth (2010-2020) in Poland
Capital region Other NUTS2 regions National average EU27
4.0 Podlaskie
Annual real GDP per head growth
3.5
(average % change on the preceding year)
Lubelskie
3.0
2011-2020
2.5
Podkarpackie
2.0 Lubuskie
Świętokrzyskie
1.5 Warmińsko-mazurskie
1.0
0.5
0.0
All Polish regions except the capital region

30
50
70
90
110
130
150
GDP (PPS) per head in 2010 (EU = 100)
(1) Bubble sizes correspond to population size rank below the EU average in terms of
Source: EUROSTAT, DG REGIO elaboration competitiveness ( 148). According to the last
edition of the Regional Competitiveness Index, the
Regional disparities are driven by the labour competitiveness of the Warsaw region is at
productivity gaps within the country. Labour 118.8% of the EU average. The second most
productivity, measured as gross value added per competitive region (Slaskie) is at 96.9% while the
person employed, stands at 80% of the EU least competitive one (Warmińsko-mazurskie)
average. In the capital city region, productivity was bottoms at 75.8%.
139% of the EU average, while it was below the
EU average in all other regions. It was lowest at
57-62% in the least developed regions (Lubelskie,
(144) The terms ‘Less/least developed’ and ‘more/most developed’

are comparisons between Poland's regions. These terms
should not be confused with the classification for cohesion
policy funds eligibility criteria.
(145) The lowest growth was in Świętokrzyskie (2.3%), Warmińsko-
Mazurskie (2.4%) and Lubuskie (2.5%).
(146) GDP per capita was as follows: Lubelskie (52%), (147) Labour productivity was as follows: Lubelskie (57%),
Podkarpackie (53%), Warmińsko-Mazurskie (54%), Świętokrzyskie (58%), Warmińsko-Mazurskie (61%),
Świętokrzyskie (55%) and Podlaskie (56%). Podkarpackie (61%) and Podlaskie (62%).
(148) 2022 Regional Competitiveness Index.
66
Table A17.1: Selected indicators at regional level - Poland
At risk of
Productivity (GVA Real Regional
GDP per head GDP per head Unemployment R&D poverty or GHG
Region Name (PPS) per person productivity Competitiveness
(PPS) growth rate expenditure social emissions
employed) growth Index (RCI)
exclusion
Average %
Average % tCO2
change on the Index - values
Index, EU27 = Index, EU27 = 100, change on the % of active % of GDP, % of population, equivalent per
preceding range between 0
100, 2021 2020 preceding year, population, 2021 2019 2020 head,
year, 2011- and 100, 2022
2011-2020 2021
2020
European Union 100.0 100.0 0.2 0.6 7.0 2.3 16.6 100.0 7.2
Poland 77.0 80.1 2.3 3.0 3.4 1.3 17.0 88.7 10.9
Małopolskie 71.0 73.0 1.9 3.2 3.2 2.2 15.1 94.3 9.7
Śląskie 79.0 83.1 1.9 2.5 2.9 0.9 11.4 96.9 15.5
Wielkopolskie 83.0 82.4 1.7 3.3 2.2 0.8 18.1 84.8 8.9
Zachodniopomorskie 64.0 71.2 0.3 2.5 3.5 0.6 15.0 82.1 10.4
Lubuskie 62.0 68.9 2.6 2.5 2.0 0.5 14.2 82.1 7.4
Dolnośląskie 86.0 89.4 1.9 2.9 4.0 1.2 12.7 89.1 9.3
Opolskie 62.0 70.7 1.4 2.5 2.7 0.5 16.3 83.5 22.9
Kujawsko-Pomorskie 62.0 66.5 1.3 2.6 4.4 0.7 19.7 82.1 10.8
Warmińsko-Mazurskie 54.0 60.6 1.9 2.4 3.5 0.8 24.2 75.8 7.7
Pomorskie 75.0 76.4 0.9 2.9 2.3 1.7 12.4 90.4 8.5
Łódzkie 73.0 73.0 3.9 3.4 4.4 1.0 16.4 86.1 15.1
Świętokrzyskie 55.0 58.2 3.4 2.3 4.4 0.5 17.2 76.7 12.6
Lubelskie 52.0 57.1 3.7 2.7 5.1 1.1 26.0 79.0 10.9
Podkarpackie 53.0 60.8 2.7 2.6 4.8 1.2 22.0 82.7 7.6
Podlaskie 56.0 61.5 2.4 2.9 3.1 0.8 24.2 78.8 9.9
Warszawski Stołeczny 166.0 138.6 1.2 2.9 2.1 2.6 12.8 118.8 5.3
Mazowiecki Regionalny 67.0 75.9 4.0 3.0 3.8 0.5 24.0 80.3 15.4
Source: EUROSTAT
Regional disparities in labour market ranged from -0.1% in Podlaskie to -1.7% in

conditions remained high in 2021. The labour Lubelskie, although Podkarpackie suffered a
market was stronger than in the EU as a whole severe economic drop of -5.5%.
and only Podkarpackie had an employment rate
below the EU average (68% versus 73%). The The labour market was resilient during the
employment rate ranged from 84% in the capital COVID-19 pandemic, but the downward trend
region to less than the national average (75%) in in unemployment has reversed in some
several regions, including the less developed ones regions. Unemployment decreased in
(Podkarpackie, Warmińsko-Mazurskie and Wielkopolskie, Opolskie, Pomorskie, Lubelskie,
Lubelskie ( 149)). The unemployment rate, which is Podkarpackie and Mazowiecki Regionalny between
very low in Poland, was lowest at 2-2.1% in the 2019 and 2021, while the rate increased most (by
Lubuskie and capital regions and was 5.1% in the 0.4-0.7 percentage points) in Małopolskie,
least developed Lubelskie region ( 150). Kujawsko-Pomorskie, Śląskie, Dolnośląskie and
Łódzkie.
The COVID-19 pandemic caused the first
economic recession in three decades, and the The social situation did not deteriorate
economic fallout was distributed unequally. during the pandemic in most regions, but
Between 2019 and 2020, GDP per capita dropped high regional disparities in povery persist.
in all Polish regions except Łódzkie (+1.3%). The Around a quarter of the population in some of the
impact of the pandemic was particularly severe in less developed regions (Lubelskie, Warmińsko-
some populated and prosperous regions like Mazurskie and Podlaskie) remained at risk of
Warszawski Stołeczny (-4.7%), Śląskie (-5.5%) and poverty or social exclusion (AROPE) in 2021, while
Pomorskie (-4.6%). It was much milder in less the rate was below 13% in Śląskie, Pomorskie,
developed regions, where the fall in GDP per capita Dolnośląskie and Warszawski Stołeczny.
The large inflow of displaced people from

(149) Podkarpackie (68%), Warmińsko-Mazurskie (73%), Ukraine increased demand for public services
Lubelskie (73%), Świętokrzyskie (74%) were some of the
regions with the lowest employment rate (aged 20-64),
and housing. This created fiscal pressures in the
while it reached 76% in the Podlaskie region. short term including on local government but has
also contributed to increased consumption ( 151). In
(150) The unemployment rate was as follows: Lubelskie (5.1%),
Podkarpackie (4.8%), Świętokrzyskie (4.4%), Warmińsko-
Mazurskie (3.5%) and Podlaskie (3.1%). The national average (151) Source: the World Bank, 2022, EU Regular Economic Report:
was 3.4%. Living up to Potential in the Wake of Adverse Shocks.
67
January 2023, 1 515 194 refugees from Ukraine
had registered for temporary protection in Poland,
mostly in Małopolskie, Mazowieckie, Dolnośląskie.
Educational assistance is crucial for refugees.
191 150 refugee pupils from Ukraine were
registered at schools and assigned to primary and
preparatory classes in Polish regions, mostly in
Mazowieckie, Śląskie and Dolnośląskie ( 152). Civil
society has been playing a significant role in
assisting the displaced persons fleeing the war in
Ukraine.
(152) Source: the UN Refugee Agency, 2022, refugees from

Ukraine registered in Poland by district.
68
MACROECONOMIC STABILITY
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS
Polish banks have a solid business profile Credit growth is faltering as monetary policy
with limited foreign exposure. With total assets normalises. The central bank of Poland has
equivalent to the country’s economic output, embarked on a campaign to rapidly tighten
Poland’s banking sector is one of the largest in monetary policy to combat rapidly rising inflation.
central and eastern Europe and by far the largest Higher interest rates have severely depressed
component of the Polish financial sector. Polish demand for credit. Factors such as uncertainty, the
banks are a strong pillar of the economy and have rising cost of living, and the worsening
been critical in supporting the country’s rapid macroeconomic outlook have also played a major
economic growth in recent years. The sector is role in depressing demand. Moreover, stricter
mostly Polish owned, with 56.4% of total banking- supervisory requirements by the Polish Financial
sector assets controlled through Polish investors, Supervision Authority have affected the way in
mostly the Polish state. Local lenders are well which lenders assess clients’ creditworthiness, and
diversified and highly competitive – the top five this has weighed on mortgage lending. In contrast,
lenders hold some 57% of total banking-sector corporate lending (mostly current-account and
assets. Notwithstanding some efforts to expand working-capital loans), remained robust for most
internationally, the sector has a very limited of 2022. As firms returned to their regular
footprint abroad. operations and public pandemic-aid schemes were
discontinued, financing lines had to be replaced,
The banking system shows strong resilience mainly through the use of corporate credit.
but faces multiple challenges. The banking Nonetheless, despite robust GDP growth, the
sector has recovered rapidly from the pandemic, annualised growth rate of private-sector credit
buoyed by strong GDP growth in 2021 and early started declining by mid-2022, weighed down by
2022. More recently, and given the prevalence in declines in household credit. The mortgage-credit
Poland of loans at variable interest rates, segment was particularly affected. Poland’s Credit
monetary-policy tightening has significantly Bureau reported that the number of submitted
improved the sector’s profitability. However, rising applications for mortgage loans declined in
interest rates have also brought a sizeable December 2022 by over 60% year-on-year, and
increase in borrowing costs and considerably was negative for every single month since the
increased credit risk for lenders in a context of beginning of 2022.
high inflation and slowing economic growth.
Moreover, as in previous years, many local lenders Graph A18.1: Credit growth
continue to face significant legal risks associated 20 %
with the legacy portfolio of mortgage loans issued
in foreign currencies. Polish lenders have built
15
substantial provisions for these mortgages, and
proactively started various voluntary settlement
10
programmes for foreign-currency borrowers. But
despite this, legacy foreign-currency mortgages
5
will continue to fuel uncertainty. Additionally, wary
of the rapidly rising credit costs and repayment
burden faced by borrowers, Polish authorities 0
legislated in mid-2022 for a ‘credit holiday’ on

Polish-zloty mortgage loans. The bill allows -5
borrowers to postpone up to eight mortgage

instalments over 2022-2023. The aggregate costs -10 Total private NFC HH
(exclusively born by banks) will ultimately depend

on uptake, but they are bound to have a sizeable Source: ECB.
impact on the sector’s profitability. Non-
performing loans (NPL) remain higher than the
European average (4.6% and 1.8% respectively)
but have been trending down since 2017.
69
Table A18.1: Financial soundness indicators
2017 2018 2019 2020 2021 2022 EU Median
Total assets of the banking sector (% of GDP) 95.5 92.5 92.3 102.1 100.7 92.8 276.8 207.9
Share (total assets) of the five largest banks (%) 47.5 49.5 49.8 54.3 56.6 - - 68.7
Share (total assets) of domestic credit institutions (%)1 54.8 53.3 54.0 56.6 57.4 56.6 - 60.2
NFC credit growth (year-on-year % change) 8.6 6.6 2.9 -6.4 4.5 9.6 - 9.1
HH credit growth (year-on-year % change) 6.4 5.6 6.5 1.5 5.0 -4.4 - 5.4
Financial soundness indicators:1
- non-performing loans (% of total loans) 6.6 6.2 6.1 6.0 5.0 4.6 1.8 1.8
- capital adequacy ratio (%) 18.0 17.9 17.8 19.6 17.9 17.0 18.6 19.8
- return on equity (%)2 6.9 7.0 6.9 3.1 4.8 4.5 6.1 6.6
Cost-to-income ratio (%)1 57.2 56.7 56.0 54.2 54.5 48.6 60.6 51.8
Loan-to-deposit ratio (%)1 93.7 93.2 91.9 80.3 77.4 78.0 88.6 78.0
Central bank liquidity as % of liabilities 0.0 0.4 0.0 0.0 0.0 0.0 - 2.9
Private sector debt (% of GDP) 77.3 76.7 74.2 76.1 71.4 - - 120.7
Long-term interest rate spread versus Bund (basis points) 310.3 280.2 260.0 200.8 232.0 491.2 - 93.3
Market funding ratio (%) 48.0 45.7 44.6 48.0 47.8 - 50.8 40.0
Green bonds issued to all bonds (%) - 0.4 1.2 1.3 1.5 1.7 3.9 2.3
1-3 4-10 11-17 18-24 25-27 Colours indicate performance ranking among 27 EU Member States.
(1) Last data: Q3 2022.
(2) Data is annualized.
Source: ECB, Eurostat, S&P Global Capital IQ Pro
Source:
Legal risks remain elevated as borrowers interest rates) in 2022 as well as the phasing in of
challenge the validity of legacy loans issued the intermediate MREL target. Funding and
in foreign currencies. Over a decade after Polish liquidity are solid and well above regulatory
banks stopped issuing Swiss-franc-denominated minima, and banks are efficient overall with strong
mortgages, these legacy loans continue to create operational profitability. Nevertheless, banks’
financial stability risks. Following a set of rulings financial results – and therefore their capital-
favourable to Swiss-franc borrowers from the generation capacity – will come under pressure
Court of Justice of the European Union (CJEU), an from: (i) the large provisions for legacy foreign-
increasing number of borrowers are now currency loans; (ii) losses induced by the mortgage
challenging the validity of their loan agreements in repayment holiday; and (iii) the expected heavier
Polish courts. These borrowers are citing provisioning for future credit risk, mainly in the
essentially the abusiveness of the indexation corporate and consumer loan segments, the two
clauses embedded in these contracts. The segments heavily affected by the rapid rise in
remaining portfolio is of reasonably high quality interest rates. Lastly, in the current higher interest
and relatively small (worth some PLN 50 bn (EUR rate context, funding is also set to become more
10.75 bn)by end-2022, equivalent to about 12% expensive.
of the outstanding value of mortgage loans).
Nevertheless, the legal risk associated with these The insurance sector is coming under
loans remains a major financial-stability risk. The pressure. Domestic insurers are largely well
costs generated by this risk (mainly through capitalised and are highly solvent according to the
provisions) will remain elevated over the coming solvency capital requirement data. They also have
months as banks need to factor in various good overall profitability. Nevertheless, the
outcomes. This includes tail risks that could resilience of local insurers can be somewhat
materialise if court rulings are highly unfavourable overestimated due to the unusually high
to the banks. In this context, guidance by the CJEU proportion of expected profits included in future
will be critically important. premiums and the double gearing of capital.
Moreover, the performance of the insurance sector
Solvency remains adequate but lower may be challenged in the future by: (i) inflation at
profitability may impact banks’ capital multi-decade highs biting into households' real
positions. Soundness indicators remain overall at disposable income; (ii) large foreign-exchange
safe levels and indicate that Polish banks are movements; and (iii) rising operating costs.
conservatively and prudently managing various
incoming risks. Capital ratios were adversely
impacted by the decline in the balance-sheet value
of government bonds (affected by the rising
70
ANNEX 19: TAXATION
This Annex provides an indicator-based policies related to environmental sustainability,

overview of Poland’s tax system. It includes see Annex 6).
information on the tax structure (the types of tax
that Poland derives most of its revenue from), the Poland’s labour tax burden was less
tax burden on workers, and the progressivity and progressive than the EU average in 2022.
redistributive effect of the tax system. It also Graph A19.2 shows that the labour tax wedge for
provides information on tax collection and Poland in 2022 was below the EU average for
compliance. single people across levels of income. The gap is
larger for higher levels of income. Second earners
Poland’s tax revenues are relatively low in at a wage level of 67% of the average wage,
relation to GDP and rely on consumption whose spouses earn the average wage, were
taxes more than the EU average. Table A19.1 subject to a tax wedge that was below the EU
shows that Poland’s tax revenues as a percentage average. In 2021, the ability of the Polish tax and
of GDP were considerably below the EU aggregate benefit system to reduce income inequality (as
in 2021, even though they increased by about 5 measured by its ability to reduce the GINI
percentage points (pps) since 2010. The share of coefficient) was still comparatively low (Table
labour taxes as a proportion of total tax revenues A19.1).
was significantly below the EU aggregate, but
revenues from consumption taxes and A major 2022 tax reform (‘Polish Deal’) is
environmental taxes were above the EU aggregate, expected to reduce the overall tax burden for
as a share of both GDP and total taxation (see employees, especially at lower earnings.
Graph A19.1). Revenues from capital and property Effective in January 2022, the reform raised the
taxes were close to the EU aggregate. Within tax-free amount to PLN 30 000, decreased the
environmental taxes, the contribution of energy lower personal income tax rate from 17% to 12%,
taxes was relatively high in 2020 (7.1% of tax and increased the threshold to PLN 120 000 from
revenue) when compared with the EU average of which the 32% upper tax rate applies. Universal
4.3% (see Graph A19.1). However, transport taxes tax credit has been extended. The reform also
represented only 0.5% of tax revenue (the EU reduced the tax burden on workers delaying
average was 1%). This means that there would be retirement beyond the statutory, creating
room to introduce a tax on passenger cars with a incentives to increase the effective retirement age.
tax base related to emissions. (For more on These measures are estimated to have reduced
Table A19.1: Taxation indicators

Poland EU-27
2010 2019 2020 2021 2022 2010 2019 2020 2021 2022
Total taxes (including compulsory actual social contributions) (% of
31.6 35.2 35.6 36.8 37.9 39.9 40.0 40.6
GDP)
Labour taxes (as % of GDP) 11.9 14.2 14.3 14.2 20.0 20.7 21.3 20.9
Consumption taxes (as % of GDP) 12.5 12.3 12.4 13.5 10.8 11.1 10.7 11.2
Tax structure
Capital taxes (as % of GDP) 7.2 8.6 8.9 9.1 7.1 8.1 8.0 8.5
Total property taxes (as % of GDP) 1.4 1.7 1.7 1.6 1.9 2.2 2.2 2.2
Recurrent taxes on immovable property (as % of GDP) 1.1 1.1 1.1 1.1 1.1 1.2 1.2 1.1
Environmental taxes as % of GDP 2.7 2.5 2.5 2.9 2.4 2.4 2.2 2.2
Tax wedge at 50% of average wage (Single person) (*) 32.3 34.3 33.4 33.5 29.4 33.9 32.3 31.9 32.1 31.7
Tax wedge at 100% of average wage (Single person) (*) 34.2 35.6 34.8 34.9 33.6 41.0 40.1 39.9 39.7 39.7
Progressivity &
Corporate income tax - effective average tax rates (1) (*) 15.5 15.5 15.5 19.5 19.4 19.1
fairness
Difference in Gini coefficient before and after taxes and cash social
4.7 5.3 4.6 8.6 7.7 8.1 7.8
transfers (pensions excluded from social transfers) (2) (*)
Outstanding tax arrears: total year-end tax debt (including debt
Tax administration & 29.8 39.9 31.6 40.7
considered not collectable) / total revenue (in %) (*)
compliance
VAT Gap (% of VAT total tax liability, VTTL) 12.7 11.3 11.0 9.1
(1) Forward-looking effective tax rate (OECD).

(2) A higher value indicates a stronger redistributive impact of taxation.
(*) EU-27 simple average
For more data on tax revenues as well as the methodology applied, see European Commission, Directorate-General for Taxation
and Customs Union, Taxation trends in the European Union: data for the EU Member States, Iceland, Norway and United Kingdom:
2021 edition, Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2778/843047 and the Data on
Taxation webpage, data https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en.
For more details on the VAT gap, see European Commission, Directorate-General for Taxation and Customs Union, VAT gap in the
EU: report 2022, Publications Office of the European Union, 2022, https://data.europa.eu/doi/10.2778/109823.
Source: European Commission, OECD.
71
Graph A19.1: Tax revenues from different tax types, % of total taxation
Tax revenue shares in 2021, Poland (outer ring) Environmental and property taxation as % of
and the EU (inner ring) total tax revenue, Poland and the EU
10
0.25
8 0.49
24.85 0.19
6
1.00
4 1.56 2.75
7.10
21.01 38.52
2 4.32
2.91 2.64
51.43 0
27.54 Poland - EU - Poland - property EU - property
environmental environmental taxation taxation
taxation taxation
36.63
Energy taxes Transport taxes
Resource/pollution taxes Recurrent property taxes
Taxes on labour Taxes on consumption Taxes on capital Other property taxes
the tax burden for most groups of employees, extended to small companies. 2019 saw the
especially at lower earnings (by about 3 ppts for introduction of a requirement to make split
those earning 67% of the average wage). ( 153) At payments (by which purchasers make parallel
the same time, the tax burden for self-employed payments to suppliers’ account and a VAT account)
increased due to higher health insurance and the modernisation of VAT reporting. A system
contributions. of structured e-invoices was introduced in 2021
that allows the issue and receipt of electronic
Graph A19.2: Tax wedge for single and second structured invoices via the national invoice system.
earners, % of total labour costs, 2022 The introduction of an obligation to issue invoices
45
through that system is planned for 2024.
Tax wedge, % of total labour costs
40
37.6 Poland’s VAT gap decreased significantly in
35 35.5 2021. Poland has been improving VAT collection
30 33.6 since 2015. Poland recorded one of the fastest
31.3
29.4 increases in VAT compliance in the EU between
25
2016 and 2018. In 2020, the VAT gap (the gap
20 between revenues actually collected and the
50 100 150
Earnings as % of the average wage
theoretical tax liability) decreased by
approximately 1.4 pps to 11.3 percent (see Table
Single earner - PL Single earner - EU average
A19.1). A significant increase of nearly 20% in the
Second earner - PL Second earner - EU average
value of electronic transactions and an
Second earner tax wedge assumes first earner at 100% of approximately 8.5% decline in the bankruptcy rate
the average wage and no children.
have probably contributed to the increase in VAT
compliance. Poland has not only improved digital
transformation by implementing and extending
Poland is relatively advanced in digitally SAF-T, but has also introduced measures against
transforming its tax administration, which fraud and evasion. The policy gap increased
can help reduce tax arrears. Tax arrears slightly in 2020 due to increased public
currently amount to around 40% of total tax expenditure. ( 154)
revenue (which corresponds to the EU average; see
Table A19.1). Digitalisation of Poland's tax
administration started in 2016, when Poland
implemented SAF-T (the international standard for
the electronic exchange of accounting data). The
corresponding reporting obligation was initially
imposed only on large companies but was later
(154) See: “VAT gap in the EU report 2022”, prepared by CASE –
(153) Calculations by European Commission, Joint Research Centre, Center for Social and Economic Research (project leader) and
based on the EUROMOD model, version I5.0+. Economisti Associati (consortium leader), p. 110.
72
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS
Table A20.1: Key economic and financial indicators

forecast
2004-07 2008-12 2013-19 2020 2021 2022 2023 2024
Real GDP (y-o-y) 5.4 3.3 3.9 -2.0 6.9 5.1 0.7 2.7
Potential growth (y-o-y) 3.7 4.0 3.5 3.7 3.5 3.4 3.7 3.4
Private consumption (y-o-y) 4.1 3.2 3.5 -3.4 6.1 3.3 -0.1 2.7
Public consumption (y-o-y) 4.0 1.7 3.3 4.9 5.0 -2.0 0.5 2.7
Gross fixed capital formation (y-o-y) 12.3 2.1 4.3 -2.3 1.2 5.0 2.0 3.1
Exports of goods and services (y-o-y) 10.0 4.9 6.7 -1.1 12.3 6.2 2.3 3.6
Imports of goods and services (y-o-y) 12.0 2.7 6.4 -2.4 16.1 6.2 0.0 3.1
Contribution to GDP growth:

Domestic demand (y-o-y) 5.7 2.7 3.5 -1.5 4.6 2.3 0.4 2.5
Inventories (y-o-y) 0.7 -0.3 0.1 -1.1 3.4 2.6 -1.1 -0.3
Net exports (y-o-y) -1.0 0.8 0.3 0.6 -1.1 0.2 1.4 0.5
Contribution to potential GDP growth:

Total Labour (hours) (y-o-y) 0.3 0.5 0.3 0.7 0.7 0.5 1.1 0.7
Capital accumulation (y-o-y) 1.2 1.8 1.4 1.2 1.2 1.2 1.2 1.2
Total factor productivity (y-o-y) 2.2 1.7 1.8 1.8 1.7 1.7 1.4 1.5
Output gap -0.2 1.4 0.0 -2.9 0.3 1.9 -1.0 -1.7
Unemployment rate 15.7 9.3 6.6 3.2 3.4 2.9 3.3 3.2
GDP deflator (y-o-y) 3.2 2.9 1.2 4.3 5.3 11.3 11.8 5.8
Harmonised index of consumer prices (HICP, y-o-y) 2.4 3.7 0.7 3.7 5.2 13.2 11.7 6.0
HICP excluding energy and unprocessed food (y-o-y) 1.6 3.0 0.9 4.2 4.2 10.3 10.8 6.2
Nominal compensation per employee (y-o-y) 3.0 6.1 4.7 5.3 4.7 13.2 12.7 8.3
Labour productivity (real, hours worked, y-o-y) 2.7 3.3 3.4 -1.3 0.9 5.5 0.0 2.1
Unit labour costs (ULC, whole economy, y-o-y) 0.4 3.1 1.5 7.5 0.4 8.1 12.1 5.8
Real unit labour costs (y-o-y) -2.7 0.2 0.4 3.1 -4.6 -2.9 0.3 0.0
Real effective exchange rate (ULC, y-o-y) 3.0 -1.1 -0.3 -0.2 -2.9 1.4 6.9 2.6
Real effective exchange rate (HICP, y-o-y) 4.1 -0.8 -0.4 0.5 -0.5 0.4 . .
Net savings rate of households (net saving as percentage of net disposable

income) 2.2 1.9 2.6 9.5 0.7 . . .
Private credit flow, consolidated (% of GDP) 6.5 6.9 3.9 1.8 3.8 1.8 . .
Private sector debt, consolidated (% of GDP) 46.3 70.6 77.9 76.1 71.3 63.2 . .
of which household debt, consolidated (% of GDP) 17.3 33.2 35.6 34.6 32.2 26.6 . .
of which non-financial corporate debt, consolidated (% of GDP) 29.0 37.4 42.3 41.5 39.1 36.6 . .
Gross non-performing debt (% of total debt instruments and total loans and 3.9 5.7 5.0 4.0 3.3 . . .
advances) (1)
Corporations, net lending (+) or net borrowing (-) (% of GDP) 0.8 4.1 3.4 6.4 2.9 3.3 5.7 5.4
Corporations, gross operating surplus (% of GDP) 22.4 22.8 22.7 23.4 24.4 27.2 26.9 26.1
Households, net lending (+) or net borrowing (-) (% of GDP) -1.7 -2.2 -1.2 4.2 -2.2 -2.0 -1.2 -1.0
Deflated house price index (y-o-y) . -5.4 2.0 6.7 3.7 -2.1 . .
Residential investment (% of GDP) 3.4 3.2 2.4 2.2 2.3 2.2 . .
Current account balance (% of GDP), balance of payments -5.2 -5.0 -1.5 2.5 -1.4 -3.0 -0.7 0.7
Trade balance (% of GDP), balance of payments -2.6 -2.4 2.2 5.7 3.3 1.9 . .
Terms of trade of goods and services (y-o-y) 1.5 -0.5 0.9 2.8 -2.0 -3.4 3.0 0.6
Capital account balance (% of GDP) 0.9 1.6 1.6 1.4 0.7 0.3 . .
Net international investment position (% of GDP) -44.2 -60.6 -60.2 -43.9 -39.4 -33.8 . .
NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2) -10.4 -23.1 -20.2 -4.5 0.8 2.3 . .
IIP liabilities excluding non-defaultable instruments (% of GDP) (2) 36.8 52.1 55.2 47.2 43.6 40.7 . .
Export performance vs. advanced countries (% change over 5 years) 69.0 36.4 13.3 34.3 30.6 . . .
Export market share, goods and services (y-o-y) 8.9 0.0 4.1 11.3 -0.7 2.2 -0.3 -0.2
Net FDI flows (% of GDP) -3.5 -1.8 -1.8 -2.4 -4.1 -3.9 . .
General government balance (% of GDP) -3.6 -5.4 -2.2 -6.9 -1.8 -3.7 -5.0 -3.7
Structural budget balance (% of GDP) . . -2.1 -5.7 -2.2 -5.0 -4.5 -2.9
General government gross debt (% of GDP) 45.9 52.1 51.4 57.2 53.6 49.1 50.5 53.0
(1) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches.
(2) Net international investment position (NIIP) excluding direct investment and portfolio equity shares.
Source: Eurostat and ECB as of 2 May 2023, where available; European Commission for forecast figures (Spring forecast 2023).
73
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS
This Annex assesses fiscal sustainability these developments. This position appears
risks for Poland over the short, medium and relatively ambitious compared with past fiscal
long term. It follows the same multi-dimensional performance, indicating that the country only has
approach as the European Commission’s 2022 moderate room for corrective action. At the same
Debt Sustainability Monitor, updated based on the time, the baseline projection benefits up to 2033
Commission 2023 spring forecast. from a still favourable (although declining)
snowball effect, notably thanks to the impact of
1 - Short-term risks to fiscal sustainability Next Generation EU, with real GDP growth at
are low overall. The Commission’s early- around 2.4% over 2025-2033. Government gross
detection indicator (S0) does not signal major financing needs are expected to remain limited
short-term fiscal risks (Table A21.2) ( 155). Gross over the projection period, at around 9% of GDP in
financing needs are forecast to remain relatively 2033, below the level forecast for 2024.
low. They are expected to increase temporarily to
around 11% of GDP in the short term (i.e. over The baseline projections are stress-tested
2023-2024) – due to stock-flow adjustments against four alternative scenarios to assess
reflecting a mismatch between the payment and the impact of changes in key assumptions
deliveries of military investment – but to remain (Graph 1). For Poland, reverting to a historical
below the recent peak of 2020 (Table 1 in this fiscal position under the ‘historical structural
annex). Financial markets’ perceptions of sovereign primary balance (SPB)’ scenario would significantly
risk are overall positive, as confirmed by the worsen the government debt trajectory. If the SPB
ratings of the main agencies. gradually converged its historical 15-year average
(a deficit of 1.8% of GDP), the projected debt-to-
2 - Medium-term risks to fiscal sustainability GDP ratio would be about 7 pps. higher than in the
are medium overall. baseline by 2033. The ‘lower structural primary
balance’ scenario (with the SPB level permanently
The DSA for Poland shows that, under the 1.3 pps. lower than in the baseline) would lead to a
baseline, the government debt ratio is higher government debt-to-GDP ratio (+11 pps. of
projected to increase over the medium term, GDP by 2033) compared with the baseline. A
reaching around 55% of GDP in 2033 permanent worsening of the macro-financial
(Table 1) ( 156), ( 157) The assumed structural primary conditions, as reflected under the ‘adverse
balance (a deficit of 0.8% of GDP) contributes to interest-growth rate differential’ scenario (with a
differential 1 pp. higher than the baseline) would
also result in a persistently higher debt ratio, by
(155) The S0 is a composite indicator of short-term risk of fiscal around 4 pps. of GDP by 2033, as compared with
stress. It is based on a wide range of macro-financial and the baseline. A temporary worsening of financial
fiscal variables that have proven to perform well in the past conditions, as reflected in the ‘financial stress’
in detecting situations of upcoming fiscal stress.
scenario (with. a temporary increase of interest
(156) The assumptions underlying the Commission’s ‘no-fiscal- rates by 1 pp.), would only marginally increase the
policy-change’ baseline notably comprise: (i) a structural
primary deficit, before ageing costs, of 0.8% of GDP as of
debt ratio by 2033 compared with the baseline.
2024; (ii) inflation converging linearly towards the 10-year
forward inflation-linked swap rate 10 years ahead (which Additionally, stochastic debt projections
refers to the 10-year inflation expectations 10 years from indicate low risk (Graph 2). ( 158) These
now); (iii) the nominal short- and long-term interest rates on
new and rolled over debt converging linearly from current stochastic simulations point to a 66% probability
values to market-based forward nominal rates by T+10 (as of the debt ratio in 2027 being greater than in
for all Member States); (iv) real GDP growth rates from the 2022, entailing low risk given the initial low level
Commission 2023 spring forecast until 2024, followed by of debt. The uncertainty (as measured by the
EPC/OGWG ‘T+10 methodology’ projections between T+3 and
T+10, i.e. for 2025-2033 (on average 2.4%); (v) ageing costs
difference between the 10th and 90th debt
in line with the 2021 Ageing Report (European Commission, distribution percentiles) surrounding the baseline
Institutional Paper 148, May 2021). For information on the debt projection is limited.
methodology, see the 2022 Debt Sustainability Monitor
(European Commission, Institutional Paper 199, April 2023).
(157) Table 1 shows the baseline debt projection and its (158) These projections show the impact on debt of 2000 different
breakdown into the primary balance, the snowball effect (the shocks affecting the government’s primary balance,
combined impact of interest payments and nominal GDP economic growth, interest rates and exchange rates. The
growth on the debt dynamics) and the stock-flow cone covers 80% of all simulated debt paths, therefore
adjustment. excluding tail events
74
3 - Long-term risks to fiscal sustainability recent increase in interest rates, potential legal
are medium overall ( 159). costs associated with Swiss franc-denominated
loans and exposure to non-performing loans. On
The S2 sustainability gap indicator (at the other hand, risk-mitigating factors include the
3.0 pps. of GDP) points to medium risk, lengthening of debt maturity in recent years,
suggesting that Poland would need to relatively stable financing sources (with a
significantly improve its structural primary diversified and large investor base) and the
balance to ensure debt stabilisation over the currency denomination of debt (about three-
quarters of outstanding debt is denominated in
long term. This result is underpinned both by the
local currency). In addition, the structural reforms
projected increase in ageing-related costs
under the NGEU/RRF, if fully implemented, could
(contribution of 1.7 pps. of GDP) and by the
have a further positive impact on GDP growth in
unfavourable initial budgetary position
the coming years, and therefore help to mitigate
(contribution of 1.3 pps. of GDP) (Table 2). Long-
debt sustainability risks.
term developments in ageing costs are primarily
driven by the projected increase in health care and
long-term care expenditure (joint contribution of
2.5 pps. of GDP). As a result, while a number of
investments and reforms in the RRP contribute to
supporting the efficiency of the Polish health and
long-term care systems, additional measures may
be required to further improve its fiscal
sustainability. Expenditure on public pensions is
projected to decline (contribution of -0.8 pp. of
GDP), based however on the assumption of a
strong decline in the replacement rate.
Given limited long-term debt vulnerabilities,

as highlighted by the S1 indicator, overall
long-term risks are assessed as medium.
Indeed, the S1 sustainability gap indicator signals
that a consolidation effort of 1.9 pps. of GDP
would be needed to bring debt to 60% of GDP by
2070 (Table 2). This gap entirely stems from the
initial deficit and the projected increase in ageing
costs (contributing 1.1 pps. and 0.9 pp. of GDP,
respectively), while debt already stands close to
60% of GDP.
Finally, several additional risk factors need

to be considered in the assessment. On the
one hand, risk-increasing factors are related to the
(159) The S2 fiscal sustainability indicator measures the

permanent SPB adjustment in 2024 that would be required
to stabilise public debt over the long term. It is
complemented by the S1 indicator, which measures the
fiscal gap in 2024 to bring the debt-to-GDP ratio to 60% in
the long term. For both the S1 and S2 indicators, the risk
assessment depends on the amount of fiscal consolidation
needed: ‘high risk’ if the required effort exceeds 6 pps. of
GDP, ‘medium risk’ if it lies between 2 pps. and 6 pps. of
GDP, and ‘low risk’ if the effort is negative or below 2 pps. of
GDP. The overall long-term risk classification brings together
the risk categories derived from S1 and S2. S1 may notch up
the risk category derived from S2 when it signals a higher
risk than S2. See the 2022 Debt Sustainability Monitor for
further details.
75
Table A21.1: Debt sustainability analysis - Poland
Table 1. Baseline debt projections 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Gross debt ratio (% of GDP) 57.2 53.6 49.1 50.5 53.0 52.6 52.2 51.9 52.1 52.4 52.8 53.4 54.1 55.0
Changes in the ratio 11.5 -3.6 -4.5 1.4 2.5 -0.4 -0.3 -0.3 0.2 0.3 0.4 0.6 0.7 0.9
of which
Primary deficit 5.6 0.7 2.2 3.0 1.7 1.5 1.2 1.0 1.0 1.0 1.1 1.1 1.1 1.1
Snowball effect 0.4 -5.3 -6.2 -3.5 -1.9 -1.9 -1.6 -1.3 -0.9 -0.7 -0.6 -0.5 -0.3 -0.2
Stock-flow adjustments 5.5 1.0 -0.4 1.9 2.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Gross financing needs (% of GDP) 15.7 7.6 7.8 11.5 11.4 8.8 8.6 8.4 8.5 8.5 8.6 8.7 8.8 8.9
% of GDP Graph 1. Deterministic debt projections % of GDP Graph 2. Stochastic debt projections 2023-2027
70 70
65
p90
60 60
p80
55
p60
50 50 p40
45 p20
p10
40 40
35
30 30
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2020 2021 2022 2023 2024 2025 2026 2027
Historical SPB scenario Lower SPB scenario
Financial stress scenario Adverse 'r-g' scenario Median Baseline
Baseline
Table 2. Breakdown of the S1 and S2 sustainability gap indicators

S1 S2
Overall index (pps. of GDP) 1.9 3.0
of which
Initial budgetary position 1.1 1.3
Debt requirement -0.1
Ageing costs 0.9 1.7
of which Pensions -0.6 -0.8
Health care 0.9 1.3
Long-term care 0.8 1.2
Others -0.1 0.0
Source: Commission services.
Table A21.2: Heat map of fiscal sustainability risks - Poland

Short term Medium term - Debt sustainability analysis (DSA) Long term
Deterministic scenarios
Overall Stochastic Overall
Overall Historical Lower Adverse Financial S2 S1
(S0) Baseline projections (S1 + S2)
SPB SPB 'r-g' stress
Overall MEDIUM MEDIUM MEDIUM MEDIUM MEDIUM LOW
Debt level (2033), % GDP 55.0 62.3 66.2 59.4 55.3
LOW MEDIUM Debt peak year 2033 2033 2033 2033 2033 MEDIUM LOW MEDIUM
Fiscal consolidation space 41% 75% 85% 41% 41%
Probability of debt ratio exceeding in 2027 its 2022 level 66%
Difference between 90th and 10th percentiles (pps. GDP) 19.2
(1) Debt level in 2033. Green: below 60% of GDP. Yellow: between 60% and 90%. Red: above 90%. (2) The debt peak year indicates whether debt is projected to increase overall over the next decade.
Green: debt peaks early. Yellow: peak towards the middle of the projection period. Red: late peak. (3) Fiscal consolidtation space measures the share of past fiscal positions in the country that were more
stringent than the one assumed in the baseline. Green: high value, i.e. the assumed fiscal position is plausible by historical standards and leaves room for corrective measures if needed. Yellow:
intermediate. Red: low. (4) Probability of debt ratio exceeding in 2027 its 2022 level . Green: low probability. Yellow: intermediate. Red: high (also reflecting the initial debt level). (5) the difference
between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 2000 different shocks. Green, yellow and red cells indicate increasing uncertainty.
Source: Commission services.
76
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ISSN 2443-8014 (online)

INSTITUTIONAL PAPER 245 | JUNE 2023

This paper can be downloaded from https://economy-finance.ec.europa.eu/ecfin-publications_en.

Luxembourg: Publications Office of the European Union, 2023

PDF ISBN 978-92-68-03212-1 ISSN 2443-8014 doi:10.2765/755853 KC-BC-23-052-EN-N

© European Union, 2023

2023 Country Report

EUROPEAN ECONOMY Institutional Paper 245

COMMISSION STAFF WORKING DOCUMENT

2023 Country Report - Poland

Accompanying the document

Recommendation for a COUNCIL RECOMMENDATION

{COM(2023) 621 final}

and nominal wage growth, as well as an

Poland applies the EU solidarity contribution in application of Council Regulation (EU)

Poland has started to implement key

• Reform to improve the conditions for developing hydrogen technologies and

(9) Prosumers are businesses and households that both

(16) For more details on the changes see

Poland scores 0 on the ‘link between budget & medium-

The pandemic has exacerbated existing

(23) World Bank (2022) Poland Public Finance Review.

(35) EUR-Lex - 52022SC0521 - EN - EUR-Lex (europa.eu).

Poland’s RRP includes measures to steady implementation of its recovery and

• addressing disparities in labour market • taking measures to improve the

Poland should urgently fulfil the required

A1. Sustainable Development Goals 22

A2. Progress in the implementation of country-specific recommendations 25

A3. Recovery and resilience plan - overview 28

A4. Other EU instruments for recovery and growth 29

A6. European Green Deal 33

A7. Energy security and affordability 38

A8. Fair transition to climate neutrality 44

A9. Resource productivity, efficiency and circularity 47

A10. Digital transformation 49

A12. Industry and single market 53

A13. Public administration 57

A15. Education and training 62

A16. Health and health systems 65

A17. Economic and social performance at regional level 67

A18. Key financial sector developments 70

A20. Table with economic and financial indicators 74

A21. Debt sustainability analysis 75

of the 17 Sustainable Development Goals (see

Source: European Commission

(38) 2022 CSRs: EUR-Lex - 32022H0901(21) - EN - EUR-Lex

2021 CSR 1 Some progress

(Continued on the next page)

Graph A3.1: Share of RRF funds contribution to each policy pillar

Of the investments mentioned above, EUR

transformation as part of the country’s total 50000

allocation of EUR 92 billion. In particular, the 40000

European Regional Development Fund (ERDF) will 30000

support the energy transition, a strategic priority in 20000 17,335 14,022

the capacity to produce renewable energy. 0

dwellings. The ERDF will also invest in sustainable

15,000 13,017 13,860

According to the set of resilience indicators Climate change mitigation &

similar level of vulnerabilities compared to Ecosystems, biodiversity,