A 26% plunge in coal mining weighed on Poland's industrial output in March 2024, casting a shadow over the expectations that the biggest emerging-market economy in Europe would grow by the expected 3% this year.
Coal mining output slumped by 25.9% year-over-year in March, contributing to a 6% decline in Poland's industrial production last month, government data showed on Monday. This was the steepest decline in Poland's industrial output since April 2023, per Bloomberg's estimates. It was also much worse than expectations of a 2.2% drop in industrial production.
The steep drop in the Polish industry last month raises questions about whether the EU's most coal-dependent economy would manage to see a 3% rebound in its economy this year, as the central bank and the finance ministry expect.
Still, it's too early into the year to raise flags about Poland's economy, Grzegorz Maliszewski, chief economist at Bank Millennium, told Reuters.
"I wouldn't radically change my expectations here, because there are many reasons to expect a continuation of economic recovery, as domestic demand will increase and the economic situation in Germany is also improving," Maliszewski said.
Meanwhile, Poland's new government has signaled it would be looking to set an end date for using coal for power generation, a senior government official said.
"Only with an end date we can plan and only with an end date industry can plan, people can plan. So yes, absolutely, we will be looking to set an end date," Urszula Zielinska, the Secretary of State at the Ministry of Climate and Environment, said in Brussels earlier this year.
Last year, renewables led by onshore wind generated a record share of Poland's electricity-26%, but coal continued to dominate the power generating mix, per the German research organization Fraunhofer Society.
Poland's power grid operator said last month that it would spend $16 billion on upgrading and expanding its power grid to accommodate additional renewable and nuclear capacity.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More