COMMISSION STAFF WORKING DOCUMENT 2022 Country Report - Poland Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Poland and delivering a Council opinion on the 2022 Convergence Programme of Poland
Date: 2022-05-23
Institutions: European Commission, Secretariat-General
Subjects: Poland, economic policy, economic recovery, economic reform, energy policy, independence of the judiciary, labour market, organisation of health care, public finance, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.5.2022  SWD(2022) 622 final  COMMISSION STAFF WORKING DOCUMENT 2022 Country Report - Poland Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Poland and delivering a Council opinion on the 2022 Convergence Programme of Poland {COM(2022) 622 final} - {SWD(2022) 640 final}  
 
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

demand plunged. Nevertheless, sizeable policy 
support  and  the  country’s  lower  dependence 
on  high-hit  sectors  meant  that  the  impact  of 
the crisis was much milder than the 6 percent 
EU-wide  contraction.  Real  GDP  recovered 
strongly  in  2021  despite  recurring  COVID-19 
waves  and  supply  chain  disruptions,  swiftly 
putting Poland back to its pre-pandemic output 
path.   

Inflation  has  accelerated  strongly 
in 
2021  and  2022.  HICP  inflation  surged  from 
3.4%  at  the  end  of  2020  to  10.2%  in  March 
2022, one of the highest inflation rates in the 
EU.  The  acceleration  on  inflation  was  partly 
driven  by  global  factors,  particularly  rising 
global  prices  of  commodities  and  disruptions 
in  supply  chains,  but  domestic  factors  also 
played a role. These include booming domestic 
labour  shortages,  and 
demand,  pervasive 
expectations,  which 
increasing 
prompted 
to 
increase the policy rate from 0.1% in October 
2021 to 5.25% in May 2022.   

the  National  Central  Bank 

inflation 

Russia’s invasion of Ukraine has 
clouded the economic outlook 

against  Ukraine. 

Poland’s dynamic economic growth is set 
to  be  impacted  by  the  Russian  military 
aggression 
Higher 
uncertainty,  trade  disruptions  and  elevated 
inflation  caused  by  the  war  are  expected  to 
have a sizeable impact on the Polish economy. 
First,  although  trade  links  with  Russia  and 
Ukraine  are  not  substantial,  the  collapse  of 
trade  with  these  countries  could  exacerbate 
already  existing  supply-chain  disruptions  and 
increase inflation, especially given that imports 
include  key  raw  materials  and  intermediate 
goods.  Coupled  with  rising  commodity  prices, 
this  could  put  further  pressure  on  firms  and 
households,  weighing  on  economic  activity. 

Poland’s economy performs well 
despite emerging challenges 

Poland has been successfully catching up 
with  the  rest  of  the  EU.  GDP  growth 
averaged  3.6%  between  2010  and  2019 
(compared with 1.6% in the EU), bringing GDP 
per capita vis-à-vis the EU average from 63% 
in  2010  to  73%  in  2019.  Robust  growth  was 
underpinned  by  deeper  integration  into  global 
supply chains, a significant inflow of EU funds, 
and  high  productivity  growth,  all  of  which 
supported increasing incomes.  

to 

of 

firms 

down 

Polish 

future 

Poland’s 

Poland’s 

Despite the strong economic growth seen 
in  recent  years,  several  challenges  could 
hamper 
economic 
performance. Increasing unit labour costs are 
cost-
on 
weighing 
competitiveness  growth  model.  Coupled  with 
low  innovation  levels,  this  could  hinder  the 
ability 
compete 
internationally  and  move  up  global  value 
chains.  The  low  fertility  rate  of  the  last  30 
years has led to the decline of the population 
at  working  age.  This,  as  well  as  disparities  in 
skill 
labour  market 
mismatches  could  further  weigh  on  economic 
activity  and  put  pressure  on  public  finances. 
High  dependence  on  fossil  fuels  is  also  a 
significant challenge for the country’s ability to 
develop  more  sustainably.  Thus,  well-targeted 
and  comprehensive  policy  actions  will  be 
needed  to  ensure  Poland’s  long-term  growth 
and resilience. 

participation 

and 

The  pandemic  hit  the  economy  hard,  but 
the  recession  was  milder  than  in  the  EU. 
The Polish economy was performing well prior 
to the crisis, with real GDP growing by 4.7% in 
2019  and  the  unemployment  rate  reaching 
all-time lows.  In  2020,  the  pandemic  led  to  a 
2.2%  drop  in  GDP,  as  containment  measures 
disrupted  economic  activity  and  global 

2 

 
 
 
Lower confidence about the  economic outlook 
might  also  lead  to  a  postponement  of  firms’ 
investment  decisions  and  supress  economic 
growth  over  the  medium  term.  The  latest 
European  Commission  forecast  projects  that 
real  GDP  growth  will  decelerate  to  3.7%  in 
2022  and  3%  in  2023  (see  Annex  19  for 
further details on the economic outlook). 

gas  from  alternative  sources  is  expected  to 
limit the impact on gas supplies.   

Graph 1.1: Inflation and contributions (y-o-y) 

and 

zloty 

Inflation is set to accelerate further amid 
commodity  prices,  a 
rising  global 
weakening 
supply-side 
invasion  of 
pressures.  Following  Russia’s 
Ukraine, capital outflows from Poland led to a 
significant  currency  depreciation.  This 
is 
expected  to  increase  import  prices,  which, 
coupled with supply-chain disruptions, will put 
upward pressure on inflation. Increasing global 
prices of commodities are expected to largely 
outweigh  the  reduction  in  tax  rates  paid  on 
energy  and  food  goods  put  forward  by  the 
government  throughout  2022,  as  Russia’s 
invasion  of  Ukraine  has  further  exacerbated 
tight 
supply  constraints.  Finally,  Poland’s 
labour market will likely keep supporting wage 
growth, 
inflation. 
feeding 
According  to  the  latest  European  Commission 
economic  forecast,  HICP  inflation  is  expected 
to  reach  11.6%  in  2022  and  to  remain 
elevated in 2023 at 7.3%. 

further 

into 

total 

total 

than  half  of 

The  heavy  reliance  on  imported  fossil 
fuels  contributes  to  the  instability  of 
energy prices. Poland’s energy supply heavily 
relies  on  foreign  suppliers,  particularly  on 
Russia. Just 20% of the gas Poland consumes 
is  produced  domestically  and  Russia  covers 
more 
imports.  Oil 
consumption  is  almost  entirely  reliant  on 
external  suppliers,  with  Russia  providing  72% 
of 
is 
particularly crucial in light of the growing role 
played  by  crude  in  the  Polish  mix  due  to 
increasing  demand  from  the  transport  sector. 
On  coal,  imports  provide  just  20%  of  total 
supply.  However,  external  dependency  has 
increasing  mainly  due  to  declining 
been 
domestic production (1). The decision by Russia 
to  cut  gas  exports  to  Poland  is  expected  to 
further fuel energy inflation. However, Poland’s 
high  storage  levels  and  its  ability  to  acquire 

imports.  This  dependency 

(1)  Further details provided in the ‘Priorities Ahead’ section. 

3 

Source: Eurostat. 

rise 

Sizeable  policy  support  cushioned  the 
impact  of  the  COVID-19  crisis  on  the 
labour  market.  During  the  pandemic,  the 
Polish  government  introduced  (with  support 
from  the  SURE  instrument (2))  a  series  of 
policy  packages  aimed  at  maintaining 
in 
employment  and  preventing  a 
bankruptcies. These policy packages amounted 
to  4.3%  of  GDP,  and  helped  sustain  a 
favourable  performance  of  the  labour  market 
over  2020  and  2021.  The  employment  rate 
increased steadily after a small contraction in 
Q2-2020,  surpassing 
the  pre-crisis  peak 
already  in  Q4-2020.  The  unemployment  rate 
remained  broadly  stable  at  a  low  level  over 
the same period, fuelling labour shortages and 
wage  growth.  Overall,  total  employment  is 
expected 
the 
economy  grows  and  the  inflow  of  displaced 
persons  from  Ukraine  provides  a  boost  to 
labour supply. 

increasing  as 

to  continue 

in  Ukraine 
The  humanitarian  crisis 
creates  new  social,  health  care  and 
labour  market  challenges  for  Poland.  As 
of  9  May,  approximately  1.1  million  displaced 
persons  from  Ukraine  have  applied  for 
temporary  shelter  in  Poland.  Their  integration 
will  require  significant  adaptations  in  the 
health  and  social  care  systems,  as  well  as  in 
education.  Poland  has implemented  measures 

(2)  Poland has been granted EUR 8.236 billion of financial 

assistance under the European instrument for 
temporary support to mitigate unemployment risks in 
an emergency (SURE) following the COVID-19 outbreak. 

-11357911Jan 19Mar 19May 19Jul 19Sep 19Nov 19Jan 20Mar 20May 20Jul 20Sep 20Nov 20Jan 21Mar 21May 21Jul 21Sep 21Nov 21Jan 22Mar 22%, ppsEnergyFoodCoreInflation (y-o-y) 
                                                 
  
                                                 
integration 

under the EU’s Temporary Protection Directive. 
To  facilitate 
into  mainstream 
education,  it became  an  immediate  priority to 
provide  language  courses  and  psychological 
support  to  those  fleeing  Ukraine,  as  well  as 
support to teachers. Challenges related to the 
kindergarten and school  capacities, as well  as 
sufficient  educational  staff  will  need  to  be 
addressed.  Support  will  also  be  needed  to 
facilitate  the  labour  market  integration  of 
people  fleeing  Ukraine,  which  would  benefit 
labour  supply  and  alleviate  labour  shortages 
and  wage  growth.  Poland  will  benefit  from 
exceptional 
the 
framework  of  CARE  Regulation  and  additional 
pre-financing  under  REACT-EU  to  urgently 
address  reception  and  integration  needs  for 
those  fleeing  Ukraine  as  a  result  of  the 
Russian invasion. 

flexibilities  provided 

in 

The  economy  does  not  present  any 
significant  macroeconomic 
imbalances. 
Poland  entered  the  COVID-19  crisis  with  no 
identified macroeconomic imbalances, yet with 
international 
a  negative  net 
investment 
position 
limited  risks.  With  the 
involving 
COVID-19 crisis, public debt increased but it is 
expected  to  decrease  significantly  to  below 
50%  of  GDP  in  2023,  given  the  projected 
strong  GDP  expansion.  House  price  growth 
accelerated to 10.5% in 2020, as low interest 
the 
increased  savings 
rates  and 
pandemic  led  to  a  spike  in  the  demand  for 
houses.  Nevertheless,  mortgage  growth  has 
remained  contained.  The  banking  sector 
remained  stable  throughout  the  pandemic, 
with  considerable  improvements  of  banks’ 
earnings.  Challenges  exist  going  forward, 
including  the  unresolved  problems  of  Swiss 
franc  mortgage  exposures,  but  vulnerabilities 
remain low and the banking system is overall 
regarded as stable and capital generating (see 
Annex 16).  

from 

United 

Nations 

Poland is progressing moderately well on 
some 
Sustainable 
Development  Goals  with  slower  progress 
in  health,  climate, 
innovation,  and 
reducing  inequalities,  in  line  with  the 
European  Pillar  of  Social  Rights.  The 
country scores well on indicators related to the 
share  of  people  at  risk  of  poverty  and  social 
exclusion, which have been decreasing steadily 

and  remain  amongst  the  lowest  in  the  EU 
(SDG 1). However, strong disparities exist, with 
old-age  poverty  being  particularly  high  and 
increasing,  especially  for  women  (SDG  10). 
Gender  pay  gap  declined  in  2019  and  2020 
(SDG  5).  Large  inequalities  remain  regarding 
access  to  healthcare  (SDG  3).  Poland  scores 
poorly  on  indicators  related  to  climate  action 
and  clean  energy.  CO2  emissions  have  been 
increasing steadily (SDG 13) and the share of 
renewable energy in total energy production is 
low (SDG 7). Finally, innovation performance is 
poor and has seen little progress (SDG 9) (see 
Annex 1).  

Graph 1.2: Wages, employment and 
unemployment 

Unadjusted data. 
Source: Eurostat 

In  the  period  2021-2027  Poland  will  be  the 
largest  beneficiary of cohesion policy  funding. 
As  shown  in  Annex  3,  contributions  from 
cohesions funds substantially contribute to the 
achievement of SDGs.  

The crisis hit public finances 

The pandemic strongly hit public finances. 
On  the  one  hand,  the  crisis  slowed  down  the 
dynamics  of  revenues  due  to  lower  economic 
activity. On the other, it led to a sharp increase 
in  expenditure, 
including  on  measures  to 
contain the economic impact of the pandemic. 
As a result, the fiscal deficit increased abruptly 
to  6.9%  of  GDP  in  2020.  In  2021,  the  deficit 
fell  to  1.9%  of  GDP  on  the  back  of  strong 

4 

 50. 55. 60. 65. 70. 75. 80. 0. 2. 4. 6. 8. 10. 12. 14.2012-Q12012-Q32013-Q12013-Q32014-Q12014-Q32015-Q12015-Q32016-Q12016-Q32017-Q12017-Q32018-Q12018-Q32019-Q12019-Q32020-Q12020-Q32021-Q12021-Q3%%Growth of nominal wages (%, y-o-y, lhs)Unemployment rate (% of labour force aged 15 to 74, lhs)Employment rate (% of population aged 20-64, rhs) 
   
in 

income 

in the personal  income tax  and put an end to 
the tax deductibility of the health contribution 
(see  Annex  18).  The  overhaul  imposed  also 
some  minimum  tax  for  companies  reporting 
(thus  affecting  also 
low  taxable 
entities that operate in low-margin industries). 
Yet,  successive  modifications  both  in  the 
legislative  process  and 
the  actual 
implementation  (adding  several  thresholds, 
reliefs  and  rates  for  taxes  and  the  health 
contribution)  eventually  resulted  in  a  more 
complicated  PIT  system.  The  idea  of  the 
overhaul  was  announced  mid-2021,  while  the 
changes  were  signed  in  law  mid-November 
2021.  While  the  government  launched  the 
information campaign taxpayers had only few 
weeks to adjust to the announced changes. On 
top  of  this,  an  additional  change  in  the  PIT 
system  was  announced  at  the  end  of  March, 
cancelling  some  changes  introduced  at  the 
beginning  of  the  year.  These  developments 
contribute 
increased 
uncertainty regarding the law making and the 
stability  of  the  tax  system.  Yet,  certainty  and 
stability  are  crucial  for  investment  rebound 
needed 
to  strengthen  Poland’s  economic 
resilience (see Annex 18). 

taxpayers’ 

the 

to 

economic  recovery.  While  the  recent  rise  in 
interest rates will increase debt servicing costs 
on  new  issuances,  debt  remained  at  a  still 
relatively low level  of 53.8% of GDP in 2021, 
and  it  is  expected  to  decrease  to  49.8%  of 
GDP in 2023.  

Graph 1.3: Key fiscal indicators 

Source: European Commission 

Public  finances  could  have  been  better 
prepared  for  the  pandemic.  Poland  did  not 
use the solid pre-Covid economic conditions to 
prepare  its  public  finances  for  a  downturn. 
These conditions included a booming economy, 
a  best-in-history  labour  market  situation  and 
robust  economic  growth  in  its  main  trading 
partners.  Instead,  Poland  implemented  costly 
policies  that  weighted  on  its  public  finances 
not  only in  the  short  term  but  also  generated 
high  long-term  liabilities  (e.g.,  social  benefits 
and 
targeting 
pensioners, 
income 
reforms, 
level,  and 
including of the working careers’ extension). As 
a  result,  while  most  EU  countries  generated 
fiscal  surpluses  before  the  pandemic,  Poland 
was running fiscal deficits (although they were 
low at 0.2% of GDP in 2018 and 0.7% of GDP 
in 2019, while the general debt fell to 46% by 
2019).  In  the  short  term,  the  deficit  is  set  to 
reach 4.4% of GDP in 2023, on the back of the 
measures 
in  response  to  the 
Russian  invasion  of  Ukraine,  including  aid  to 
refugees and increased spending on defence.  

families  with 
independently  of  their 
reversal  of  previous 

introduced 

children 

tax 

overhaul 

A  major 
increased 
uncertainty  for  taxpayers.  With  a  stated 
objective  to  increase  the  progressivity  of  the 
personal income tax (PIT), Poland implemented 
a major tax overhaul in 2022. It increased the 
tax-free  allowance  and  the  first  tax  threshold 

5 

010203040506070-8-7-6-5-4-3-2-1020102011201220132014201520162017201820192020202120222023% of GDP% of GDPGovernment budget balanceGovernment budget balance (Forecast)Forecast Data (to be updated later)Gross public debt (rhs)Gross public debt (forecast) (rhs) 
  
PRIORITIES AHEAD 
PRIORITIES AHEAD 

Ensuring the sustainability of 
public finances in light of ageing 

Short-term  fiscal  sustainability  is  not  a 
source  of  concern,  but  ageing  entails 
long-term  challenges.  Thanks  to  strong 
nominal  GDP  growth  and  relatively  low  public 
debt, fiscal challenges appear to be  limited in 
the coming years. However, in the medium and 
long  term,  the  impact  of  demographic  trends 
will  intensify.  Poland  is  one  of  the  fastest 
ageing countries in the EU: in four decades, the 
number  of  people  above  the  age  of  80  is 
expected to nearly triple, from 4% in 2019 to 
12% in 2060 (3).  This will trigger major public 
spending  on  healthcare,  long-term  care  and 
pensions.  

rising 

retirement  age, 

Ensuring  adequacy  of  pensions  will  put 
the  pension  system  under  pressure.  The 
contribution  pension  system  in  place  (with 
pensions  paid  from  the  capital  accumulated 
over  pensioners’  work  careers)  makes  the 
system  –  in  theory  –  balanced.  However,  the 
low  effective 
life 
expectancy  and  other  features  of  the  pension 
system imply that future pension benefits will 
drop significantly in relation to the final salary: 
from  54%  in  2019  to  about  25%  in  2060 (4). 
This  decline 
in  adequacy  would  not  be 
large  proportion  of 
sustainable,  as  a 
pensioners, mainly women, would be at risk of 
poverty.  A  European  Commission  analysis (5) 
shows  that  Poland  would  need  to  spend  an 
additional  6.7%  of  GDP  from  its  budget  in 
2070  only  to  maintain  the  current  level  of 

(3)  Based on Eurostat population projection (proj_19np, 

baseline projections).  

(4)  European Commission, The 2021 Ageing Report: 

Economic and Budgetary Projections for the EU Member 
States (2019-2070), Institutional Paper 148, 2021, 
Brussels. 

(5)  See above. 

6 

benefits.  This  is  more  than  it  spends  on 
healthcare today.  

The  pension  system  requires  reform.  To 
ensure  the  sustainability  of  the  system  and 
the  future  adequacy  of  pensions,  reforms  will 
be  necessary  (see  Annex  12).  This  concerns 
mainly  the  low  effective  retirement  age  and 
the  special  pension  systems  that  are  costly 
and  favour  their  members  as  compared  with 
the  general  system.  Still,  Poland  recently 
reversed  earlier  reforms  that  increased  the 
statutory  pension  age  and  had  limited  some 
privileges of uniformed services. As a result of 
the tax reform in 2022, a person who reaches 
the  retirement  age  (not  receiving  any  old-age 
or  disability  pensions)  but  remains  in  the 
labour  market  will  be  exempted  from  the  tax 
(up to PLN 86 thousand per year). This change 
might contribute to a long-term increase in the 
level  of  retirement  benefits  by  extending  the 
real  retirement  age.  On  the  other  hand,  the 
reform  risks  to  disincentivise  workers  even 
further  from  switching  from  the  farmers 
special pension system to the general pension 
system,  as  it  does  not  affect  their  health 
contributions,  as 
the  case  for  other 
taxpayers. 

is 

Initiatives to increase spending efficiency 
continue amid transparency concerns. The 
budget  system  reform  continues  and,  when 
fully  implemented,  is  expected  to  increase 
spending  efficiency  and  address  a  Council 
recommendation  by  tackling 
long-standing 
weaknesses  in  the  budget  process.  These 
complex  and  outdated  budget 
include 
classifications; 
of 
suboptimal 
information;  lack  of  genuine  medium-term 
planning,  and  a  lack  of  direct  leverage  of 
spending  reviews  on  the  budget  process.  Yet, 
during the pandemic, most of the expenditure 
to  contain  its  impact  was  channelled  via  a 
dedicated  fund  managed  by  a  development 
bank  and  via  a  financial  channel  outside  the 
budget.  As  a  result,  authorities  at  first  sight 
avoided  breaching  the  constitutional  fiscal 

recording 

 
 
                                                 
 
debt  rule  and  had  more  flexibility  and 
discretion in managing  the  funds.  In  turn, this 
limited 
of 
parliamentary 
expenditure  and  public  access  to  timely 
information on the public spending (6).  

scrutiny 

the 

technology,  engineering  and  mathematics  fell 
to  20.8%,  in  contrast  to  the  EU  trend  (EU 
26.0%).  Tackling  these  challenges  will  be  key 
for  Poland  and  contribute  to  reaching  the 
2030 EU headline target on employment. 

Tackling gender gaps and labour 
shortages  

Low labour market participation of  some 
population  groups  has  exacerbated 
labour  shortages.  The  gender  employment 
gap  has  kept  increasing  over  recent  years, 
reaching 15.7% in 2020 (see Annex  12). Care 
responsibilities for children are one of the key 
barriers  to  female  employment.  Poland  has 
one of the lowest childcare enrolment rates in 
the  EU,  with  10.2%  of  children  under  the  age 
of  3  in  formal  childcare.  Labour  market 
outcomes are weak and worsening for persons 
with  disabilities,  which  recorded  in  2020  an 
employment  rate  of  only  46.8%  compared 
with  78.1% 
for  persons  without.  The 
employment  rate  of  older  workers,  despite 
recording  a  steady  increase,  is  still  7.8  pps 
below  the  EU  average  (59.6%),  with  a  much 
bigger gap for older women, at 12.4 pps below 
the  EU  average  (53.4%).  The  reversal  of  the 
pension reform, bringing the statutory pension 
age of women to the lowest in the EU, played 
a  major  role  in  this.  Also,  the  low-skilled 
employment  rate  of  the  low  skilled  remains 
the  EU  average.  Moreover, 
well  below 
disparities  persist  between  regions  in  labour 
market conditions (see Annex 6). 

further  aggravate 
Skill  mismatches 
labour shortages and wage growth.  Some 
81%  of  employers  reported  difficulties  filling 
open  positions  in  2021  (see  Annex  12).  This 
has led to strong wage growth, which reached 
9.3%  in  the  third  quarter of  2021.  Significant 
skill  mismatches  are  partly  to  blame.  Only 
43%  of  individuals  have  at  least  basic  digital 
skills, compared to 54% in the EU (2019). The 
student  drop-out  rate  is  high  at  24.8%.  The 
in  science, 
overall  share  of  graduates 

(6)  This has also been confirmed by the Supreme Audit 
Office (see Analiza wykonania budżetu państwa i 
założeń polityki pieniężnej w 2020 r., NIK, 2021). 

The  pandemic  has  exacerbated 
the 
challenges  faced  by  the  education  and 
training  system.  Despite  very  good  results 
for  15-year-olds  in  the  latest  PISA  survey 
(2018),  Poland  has  reorganised  substantially 
the  school  system,  including  by  raising  the 
mandatory  school  age and advancing the age 
for  the  orientation  between  general  and 
vocational  paths.  Insufficient  ICT  equipment 
and  connectivity  for  schools  and  households 
with  children,  and  a  low  level  of  digital  skills 
among  teachers  and  pupils  affect  the  equal 
access  to  and  the  quality  of  education. 
Prolonged  periods  of  distance  learning  are 
likely  to  have  caused  significant  educational 
the  well-being  of 
losses  and  weakened 
students  and  teachers (7). 
Inclusiveness  in 
education  requires  additional  comprehensive 
efforts.  The  quality  of  the  initial  education 
insufficient. 
is 
received 
professional 
Additionally, 
of 
the 
limited 
the 
development,  combined  with 
financial  attractiveness  of 
teaching 
profession,  contribute  to  pronounced  staff 
shortages. 

teachers 
lack 

the 

by 

to 

has 

Poland 

enrolment 

To cope with the inflow of people fleeing 
Ukraine, 
implemented 
measures  under  the  EU’s  Temporary 
Protection  Directive.  It  has  adapted  its 
legislation 
to 
facilitate 
kindergartens, schools and universities, as well 
as  the  employment  of  school  support  and 
teaching  staff.  Dedicated  support,  including 
online training materials, has been provided to 
school  and 
pupils  and 
teachers.  New 
to  be 
kindergarten  branches  may  have 
to  accommodate  all  children 
established 
displaced  from  Ukraine. 
In  2022,  higher 
education  students  and  doctoral  students  will 

(7)  See for instance Grzelak, S., Zyro, D. (2021), Jak 
wspierać uczniów po roku pandemii. Wyzwania i 
rekomendacje z obszaru wychowania, profilaktyki i 
zdrowia psychicznego. Instytut Profilaktyki 
Zintegrowanej;, Najwyższa Izba Kontroli (2021), 
Organizacja pracy nauczyciel w szkolach publicznych; 
Evidence Institute (2022), Policy note 1/2022 

7 

 
                                                 
                                                 
be able to continue their studies in Poland and 
conduct research.  

Social  spending  is  not  always  properly 
less  on  social 
targeted.  Poland  spends 
benefits  than  other  EU  countries.  In  recent 
years,  this  difference  exceeded  4  percentage 
points  of  GDP  per  year.  Still,  a  big  part  of 
social  expenditure is universal  and directed  at 
everyone,  independently  of  the  income  level. 
This  concerns  for  instance  the  universal  child 
benefit  and  the  universal  additional  pension 
benefit, which together come at a cost of close 
to 2.5% of GDP per year. Also, while the child 
benefit was extended to all children, for over 5 
years  its  amount  has  not  been  revised  to 
reflect  inflation.  At  the  same  time,  those 
working  on  some  civil  law  contracts  do  not 
have  access  to  several  social  benefits,  e.g. 
unemployment,  maternity  and 
invalidity 
benefits.  

The  share  of  the  population  at  risk  of 
poverty  has  continued  to  decline,  but 
going forward risk factors grow. The share 
of  the  population  at  risk  of  poverty  or  social 
exclusion  decreased  from  21%  in  2016  to 
17%  in  2020  and  remains  among  the  lowest 
in  the  EU.  Importantly,  an  increase  in  the  risk 
of  poverty  of  older  people  has  occurred  over 
recent years, especially for women due to their 
shorter  careers.  Looking  forward,  risks  are 
building up. According to the available data, in 
2060  the  numbers  of  those  in  the  whole 
population  who  will  have  reached  statutory 
retirement age will be nearly two times higher 
in  2019 (8).  Women  are  particularly 
than 
exposed  to  risks  because,  due  to  the  pension 
reform  reversal,  their  careers  will  be  shorter 
than those of men. It is estimated that without 
reforms to extend working lives, a substantial 
part of female pensioners will in four decades 
receive  only  the  minimum  pension  benefit 
(which  today  amounts  to  some  290  EUR 
gross). 

(8)  Based on Eurostat population projection (proj_19np, 

baseline projections).  

8 

The health sector under strain and 
short of resources 

to 

the 

affected 

preventive 

pandemic, 

The  healthcare  system  was  under  strain 
due 
while 
underfinancing persists. In the early stages 
of the pandemic, the extensive capacity in the 
hospital  sector  was  a  valuable  asset,  but  the 
health system quickly came under strain when 
infection  rates  surged  in  subsequent  waves. 
resources  also 
The  pandemic’s  drag  on 
adversely 
services, 
treatment  for  chronic  diseases  and  serious 
medical conditions, including cancer and heart 
the  policy 
response 
diseases.  Although 
prompted 
funding, 
temporary  additional 
overall spending for the health sector in terms 
of  GDP  remains  low,  with  only  6.5  %  against 
an average of 9.9 % for the EU-27 in 2019. In 
terms  of  per  capita  expenditure,  health 
funding is also low, amounting to 44% of the 
EU  average  in  2019.  The  long-term  care 
system  is  underfunded  and  underdeveloped. 
The  share  of  population  65+  with  long-term 
care  needs  exceeds  the  EU  average  while 
public spending on long-term care is below the 
EU average (0.8% vs 1.7% in the EU in 2019). 

Its  potential 

The  healthcare  system  faces  efficiency 
and  resources  availability  challenges 
while  remaining  excessively  hospital-
centric.  Shifting 
towards  primary  and 
ambulatory care is of particular importance, as 
is  expected  to  grow 
healthcare  spending 
considerably  in  the  medium  to  long  term, 
increasing public expenditure. The primary care 
system  remains  understaffed  and  its  services 
remains 
are  overstretched. 
untapped  thus  overburdening  higher  levels  of 
care.  Some  hospitals  have  run  up  substantial 
debts  and  have  low  occupancy  rates,  while 
many medical procedures currently performed 
in  hospitals  could  be  done  at  lower  levels  of 
care and at lower costs. At the same time, the 
hospital  system  faces  chronic  underfunding 
and  deficiencies  in  supervisory  mechanisms, 
which all calls for comprehensive reform. Due 
to  unattractive  conditions,  such  as 
low 
salaries,  medical  professions  are  not  popular 
careers, and there has been a significant ‘brain 
drain’  for  doctors.  The  shortage  in  human 

 
                                                 
resources  is  significant  compared  with  other 
Member  States.  This  makes  it  necessary  to 
keep  professionals  working  beyond 
their 
retirement  ages.  E-health  is  progressing  and 
further  expansion  of  digital  services  in  health 
is planned, but modern management practices 
are  still  underused.  Access  to  care  and  long-
term  care  differs  among 
regions  with 
significant unmet needs (see Annex 14).  

Strengthening productivity and 
boosting private investment  

Productivity  growth  has  been  robust, 
supporting 
economic 
Poland’s 
convergence  to  the  EU  average.  Labour 
productivity has been expanding at one of the 
fastest  rates  in  the  EU  for  the  past  several 
years,  growing  by  3.6%  on  average  from 
2015-2019.  There  is,  nevertheless,  significant 
room  for  further  improvements,  as  labour 
productivity  is  only  around  65%  of  the  EU 
average.  In  particular,  Poland  has  one  of  the 
largest  productivity  gaps  between  SMEs  and 
large  companies  due  to  low  innovation  and  a 
weak internationalisation of smaller firms. This 
hinders  productivity,  employment,  and  the 
ability of firms to increase their export shares 
and move up global value-chains.  

Investment 

Going  forward,  low  levels  of  investment 
could limit further productivity gains and 
economic  growth.  Private  investment  as  a 
percentage of GDP in 2020 was low at 18.5%, 
well  below  the  EU-wide  average  (24.6%)  and 
that of regional peers such as Czechia (28.0%) 
is 
(29.8%). 
and  Hungary 
particularly  weak 
in  the  most  productive 
sectors, such as ICT, where rapid technological 
progress requires high investment outlays. The 
infrastructure 
share 
investment  in  total  investment  was  52.1%, 
while  intangible  assets  (e.g.  R&D  investment 
and intellectual property, inter alia)  accounted 
for  just  8.8%,  which  might  limit  the  ability  of 
the  economy  to  move-up  the  value  chain. 
Overall,  increasing  capital investments in  high 
productivity  sectors  will  be  crucial  to  sustain 
Poland’s  strong  economic  performance,  as 
increasing unit labour costs will  weigh heavily 
on cost-competitiveness. 

buildings 

and 

of 

Graph 2.1: Share of private investment in GDP 

Seasonally and calendar adjusted data. 
Source: Eurostat. 

key 

and 

uncertainty 
remain 

labour 
Regulatory 
investment 
shortages 
barriers. The investment climate continues to 
be  hindered  by  an  unpredictable  and 
burdensome regulatory environment. Frequent 
changes  to  key  laws  create  uncertainty  and 
leads  to  compliance  costs  for  businesses, 
mainly  due  to  poor  consultation  of  social 
partners  and  stakeholders  during  the  law-
making  process.  Private  investment  is  also 
limited  by  significant  skill  mismatches  in  the 
labour  market,  which  are  constraining  the 
economy’s  ability  to  restructure  towards  high 
expanding and high productive sectors. 

has 

hindered 

the  EU  has  challenged 
the  disciplinary 
of 

A  deterioration  of  the  rule  of  law  in 
the 
further 
Poland 
investment  climate.  Judicial  independence 
remains  a  serious  concern,  as  follows  from 
several  rulings  of  the  Court  of  Justice  of  the 
European  Union  and  the  European  Court  of 
Human  Rights.  In  particular,  the  Court  of 
Justice  of 
the 
functioning 
regime 
applicable  to  Polish  judges  and  this  ruling 
remains  to  be  implemented.  An  order  for 
interim measures of July 2021 of the Court of 
Justice  of 
judicial 
independence  has  still  not  been  implemented. 
launched  an 
In  addition,  the  Commission 
infringement 
Poland 
following  the  Polish  Constitutional  Tribunal 
ruling,  which,  according  to  the  Commission, 

to  protect 

procedure 

the  EU 

against 

9 

 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.2012-Q12012-Q32013-Q12013-Q32014-Q12014-Q32015-Q12015-Q32016-Q12016-Q32017-Q12017-Q32018-Q12018-Q32019-Q12019-Q32020-Q12020-Q32021-Q12021-Q3% of GDPPolandEU27 
  
challenged  notably  the  primacy  of  EU  law (9). 
These developments contribute to a perceived 
judicial  protection  and 
lack  of  adequate 
judicial 
the 
impairing 
investment  climate  and  the  sustainability  of 
economic  growth  over  the  medium  to  long 
term. 

independence, 

fight  against  high-level 

The  legal  and  institutional  framework  to 
prevent  and  combat  corruption  is  largely 
in place, although with some weaknesses. 
The  2021  Rule  of  Law  Report (10)  points  to 
several  risks  regarding  the  effectiveness  of 
corruption, 
the 
including  a 
influence  on 
risk  of  undue 
corruption  prosecutions  for  political  purposes. 
Specifically, the Report mentions concerns over 
the  independence  of  the  main  anti-corruption 
bodies, with, for instance, the subordination of 
the  Central  Anti-Corruption  Bureau  to  the 
executive. 

Slow take-up of innovative and 
digital solutions 

Despite  some  progress,  Poland 
lags 
behind  in  terms  of  innovative  outputs. 
Strengthening  the  innovative  capacity  of  the 
economy  will  enable  it  to  produce  more 
advanced  products  and  services  and  move 
away  from  its  cost  competitiveness-based 
growth  engine.  Numerous  efforts  were  made 
in  recent  years  and  total  R&D  spending  has 
been  steadily  increasing,  reaching  1.39%  of 
GDP in 2020 (ranking 17th in the EU), up from 
0.94%  in  2014.  Nevertheless,  Poland  only 
ranks  25th  in  the  2021  European  Innovation 
Scoreboard  and  is  classified  in  the  lowest 
category  of  emerging  innovators  (see  Annex 
8). Moreover, regional disparities in innovation 
outcomes  and  R&D  expenditures  persist  (see 
Annex 15). 

The  quality  of  the  science  base  and  high 
fragmentation  of  the  research  support 

(9)  European Commission, Rule of Law: Commission 

launches infringement procedure against Poland for 
violations of EU law by its Constitutional Tribunal, 22 
December 2021. 

(10)  EUR-Lex - 52021SC0722 - EN - EUR-Lex (europa.eu) 

of 

the 

total 

number 

hamper 

science-business 
system 
cooperation.  Poland  ranks  last  in  the  EU  in 
public-private  scientific  co-publications  as  a 
percentage 
of 
publications.  Recent  changes  in  the  scientific 
evaluation system do not properly support the 
development and internationalisation of Polish 
research 
they 
disincentivise  scientific  excellence  by  being 
biased 
in  national 
scientific  journals  (see  Annex 8).  Increasing 
fragmentation  of  current  research  support 
instruments,  often  with  the  remit  of  various 
line ministries and with a risk of duplication of 
support  between  national  and 
regional 
agencies, impairs possible synergy gains.  

institutions.  For  example, 

towards  publications 

The  number  of 
innovative  companies 
remains  low  and  digitalisation  is  lagging 
behind.  Only  23.7%  of  businesses  are 
innovative (second to last in EU against an EU 
average  of  50.3%,  Community 
Innovation 
Survey  2018)  and  business  R&D  expenditure, 
increases,  remains  below  the  EU 
despite 
average  (0.87%  compared  with  1.53%  in 
2020).  Low  capability  in  proper  management 
and  adoption  of  technology  are  among  the 
main  constraints  to  increased  innovation  and 
productivity  growth. 
is  a  high 
productivity  gap  between  small  and  large 
companies 
in  Poland  while  R&D  support 
programmes  targeting  a  range  of  companies, 
including  SMEs,  and  facilitating  for  example 
that  acquisition  of 
remain 
underdeveloped.  Only  half  of  Polish  SMEs  are 
ready  to  take  up  digital  challenges  while  few 
businesses  make  use  of  advanced  digitalised 
such  as  big  data,  artificial 
solutions 
intelligence 
cloud 
technology 
infrastructure (see Annex 7). 

intangibles 

There 

and 

While  the  take-up  in  fixed  broadband  is 
increasing, challenges in the development 
of 5G remain high. Poland scores well in the 
coverage  of  very  high  capacity  network,  with 
70%  of  households,  equal  to  the  EU  average. 
Overall  fixed  broadband  take-up  is  steadily 
increasing (69% compared with 62% in 2019). 
In  2020,  43%  of  households  had  access  to  a 
fixed  broadband  connection  of  at 
least 
100Mbps,  above  the  EU  average  of  41%. 
However,  5G  readiness  is  not  progressing 
because  the  harmonised  radio  spectrum  for 

10 

 
                                                 
5G deployment has yet to been assigned (see 
Annex  8).  More  regulatory  certainty  is  needed 
to ensure timely 5G planning. 

Decreasing fossil fuel dependency 
and embracing the path towards 
climate neutrality 

Poland’s  energy  mix  remains  heavily 
reliant on fossil fuels, especially on coal, 
and  decarbonisation  efforts  need  to  be 
stepped up (see Annex 5). In 2020, the share 
of  fossil  fuels  in  total  energy  supply  was 
around  86%,  with  coal  alone  accounting  for 
40% of it. Poland produces around 70% of its 
electricity  through  conventional  coal  power 
plants and coal accounted for 59 % of energy-
related  CO2  emissions  in  2019.  The  country 
also features the EU’s highest share of coal in 
heating.  The  greenhouse  gas  emissions 
intensity  of  the  economy  stands  54%  above 
the  EU  average  due  to  the  coal-based  power 
generation  and  the  economy’s  reliance  on 
heavy manufacturing (see Annexes 5 and 6). If 
carbon 
left  unaddressed,  Poland's  high 
intensity  could  seriously  harm  its  economic 
competitiveness  and  undermine  efforts  to 
reduce dependence on fossil fuel imports from 
Russia. Against this backdrop, it is essential to 
implement timely reforms and investments to 
accelerate the deployment of renewables in all 
sectors and rapidly reduce the energy intensity 
of the economy and the share of fossil fuels in 
the  energy  mix  taking 
just 
transition concerns. This would  strengthen the 
climate  and  environmental  sustainability  of 
the  Polish  energy  system  as  well  as  the 
country’s security of energy supply.    

into  account 

Poland has increased its coal dependency 
on  Russia  in  recent  years.  While  it  still 
produces around 80% of the coal it consumes, 
its  imports  have  been  increasing  due  to 
declining domestic production. Poland is now a 
net  importer  of  hard  coal  and  Russia  covered 
in  2020  around  74%  of 
its  total  coal 
imports (11),  which  in  2020  amounted  to13.1 

(11)  Eurostat (2020), share of Russian imports over total 
imports of hard coal. Total imports include intra-EU 
trade..  

thermal  coal 

million  tonnes.  Its  dependency  is  even  more 
pronounced  when  only 
is 
considered,  with  imports  accounting  for  82% 
of  total  consumption  in  2020  and  90%  of 
these coming from Russia. As 75% of the coal 
imported  by  Poland  is  used  in  home  heating 
and small  district  heating  plants,  reforms  and 
investments to promote decarbonised heat will 
be  crucial  to  reducing  import  dependence. 
Against this backdrop, a solid and accelerated 
coal-phase  out  schedule,  which  takes  in  due 
account  the  social  and  regional  dimensions 
(see  Annex  15),  would  not  only  contribute  to 
bringing Poland’s energy policy in line with the 
EU  2030  GHG  emissions  reduction  target  but 
would  also  strengthen  the  country’s  energy 
security. To  ensure  the  social  sustainability  of 
the coal phase-out, Poland can rely on EUR 3.8 
billion  from  the  Just  Transition  Fund  (see 
Annex 3).  

investments 

Infrastructure 
have 
increased  the  diversification  of  Poland’s 
gas supply. Gas as a whole account for 17% 
of  Poland’s  energy  mix.  Total  consumption  of 
natural  gas is  growing  and  reached  20.1  bcm 
in 2020, Imports cover more than 80% of total 
consumption  and  Russia  remains  the  largest 
supplier,  providing  55%  of  total  imports  in 
2020 (12).  Thanks  to  the  creation  of  new 
infrastructure, in particular the EU-funded LNG 
terminal, Poland has diversified its natural gas 
imports.  Since  2014,  gas  imports  from  the 
east  (mostly  Russia)  have  remained  broadly 
stable,  while  imports  from  other  countries 
have  almost  tripled.  As  new  ongoing  and 
planned  EU-funded  infrastructure projects will 
come to fruition, especially the interconnectors 
with  neighbouring  countries,  Poland’s  reliance 
on Russian gas is set to decrease substantially. 
The  total  import  capacity  from  other  sources 
beyond  Russia is  expected  to  increase  from  7 
bcm  currently  in  place,  to  additional  around 
17.6  bcm  by  the  end  of  2022,  when  the 
current  supply  contract  is  set  to  expire  and  a 
further 7.5 bcm approximately in the mid-term 
when  the  expansion  of  the  LNG  terminal  to 
8.3bcm  per  year  is  finalised  and  the  new 

(12)  Eurostat (2020), share of Russian imports over total 
imports of natural gas. Total imports include intra-EU 
trade. Total imports include intra-EU trade. 

11 

 
                                                 
                                                 
 
Floating  Storage  and  Regasification  Unit 
(FSRU) is operational. The direct impact of the 
suspension  of  supplies  of  gas  to  Poland  by 
Gazprom as of April 2022 on Poland’s energy 
security  is  significantly  mitigated  by  Poland’s 
access  to  alternative  supplies,  within  and 
outside  the  EU.  However,  the  suspension 
requires  an  acceleration  of  ongoing  and 
planned  supply diversification projects as well 
as  increased  coordination  of  further  actions 
within  the  EU.  In  this  context,  intensified 
actions 
contracts  with 
diversified  suppliers  are  critical  to  ensure 
security  of  Polish  energy  supply.  New 
infrastructure 
investments 
related to gas are recommended to be future-
proof where possible, in order to avoid carbon 
lock-in  and  stranded  assets  as  well  as  to 
facilitate their long-term sustainability through 
future repurposing for sustainable fuels. 

to  secure  new 

network 

and 

to 

risk 

Diversification 
be 
efforts 
undermined by the energy policy’s strong 
focus  on  natural  gas.  Based  on  the  Energy 
Policy of Poland until 2040, Poland intends to 
almost  quadruple  its  gas-fired  generation, 
which would increase from 14 TWh in 2019 to 
53  TWh  in  2030.  Corresponding  investment 
needs  of  the  gas  power  generation  sector 
(including  heat  generation)  between  2021-
2040  are  estimated  at  close  to  EUR  9  billion. 
The  strategy,  which is  based  on  ETS  prices  at 
EUR  60  by  2040,  underestimates  the  impact 
of higher carbon prices, leaves Poland exposed 
to  gas  price  volatility,  negatively  affects  its 
energy  security,  and  risks  exposing  citizens  to 
energy poverty. Moreover, the unabated use of 
natural  gas  will  be  increasingly  incompatible 
with  the  EU  emissions  reduction  objectives. 
Consequently, the strategy should  be  updated 
to avoid long-term lock in of natural gas in the 
energy  mix  and  the  creation  of  stranded 
assets.  The  planned  large  recourse  to  natural 
gas  for  building  heating  to  replace  coal 
burning  can  be  alleviated  by  connecting  more 
homes  to  renewables  and  waste  heat  based 
district heating and investing in improving the 
thermal  insulation  of  buildings  and  in  heat 
pumps.  The  REPowerEU  Communication  has 
sustainable 
indicated 
to 
biomethane  production  will  contribute 
phasing  out  the  EU’s  dependency  on  Russian 
fossil fuels. In this context, Poland has room to 
exploit  the  untapped  potential  of  sustainable 

increasing 

that 

for 

the 

the 

relevant 
biomethane  complying  with 
sustainability  criteria  through  an  appropriate 
strategy 
establishment  of  a 
biomethane  market  and  concrete  proposals 
Sustainable 
concerning 
biomethane  could  be  employed 
the 
in 
cogeneration  of  heat  and  electricity  and  of 
renewable hydrogen, which could be useful to 
decarbonize hard-to-abate sectors.   

structure. 

its 

Poland  depends  on  foreign  suppliers  for 
the  quasi-totality  of  its  oil  demand  and 
imports  from  Russia,  albeit  declining, 
represent  72%  of  total  imports (13).  Oil 
plays  a  growing  role  in  the  Polish  energy 
system  with  its  share  in  total  final  energy 
consumption  increasing  from  33%  to  39% 
between 2010 and 2020, mainly due to strong 
demand growth in the transport sector. Today 
oil represents 28% of the energy mix and 96% 
of  the  crude  supply  is  covered  by  imports. 
Since 2014 Poland has worked to diversify its 
oil 
seaborne 
imports,  mainly  from  Saudi  Arabia.  The 
transport sector is responsible for around 70% 
of total oil consumption. Accelerated actions to 
decarbonize  mobility,  among  others  by 
providing  regulatory  incentives  to  accelerate 
deployment of alternatively fuel infrastructure, 
are  crucial  to  reduce  oil  demand  and  lessen 
reliance on Russian imports.   

increasing 

through 

supply 

The 
slow  pace  of  decarbonisation 
contributes  to  high  electricity  prices  for 
households.  Poland  has  been  decarbonising 
at  the  second  slowest  rate  among  all  lower 
income  Member  States,  registering  by  2020 
only  8%  reductions  in  total  GHG  emissions 
compared to 2005. The clean energy transition 
represents an opportunity for Poland to reduce 
the  exposure  of 
to 
fluctuations 
in  the  price  of  fossil  fuels, 
particularly  gas,  and  mitigate  the  impact  of 
carbon costs on energy prices. The sale of ETS 
emissions  allowances  generated  EUR  5.6 
billion  in  2021  alone.  Targeting  these  as  well 
as other EU and national resources to increase 
energy  efficiency  and  accelerate  the  green 

its  energy  system 

(13)  Eurostat (2020), share of Russian imports over total 
imports of crude oil. Total imports include intra-EU 
trade. Crude oil does not include refined oil products.  

12 

 
                                                 
 
transformation across all the economic sectors 
would  ultimately  contribute 
reducing 
consumers’ electricity bills. 

to 

Graph 2.2: GHG intensity of Poland and EU27 

Source: European Commission, Carbon Action Progress 
Report 2021 

from 

increase 

significant 

of 
renewable 

energy 
A 
production 
energy 
sources  is  a  crucial  step  to  achieve 
climate  neutrality.  In  2020,  16%  of  total 
consumption  was  generated  by 
energy 
renewable  sources  in  Poland,  against  an  EU 
average  of  22%.  The  current  2030  target  of 
21 to 23% set out in the National Energy and 
Climate  Plan  lacks  ambition  (see  also  Annex 
5).  Moreover,  the  plan  lacks  details  regarding 
policies and measures for delivering even this 
target.  Additional  measures  therefore  need  to 
be put in place to incentivise renewables, even 
more in the light of more ambitious renewable 
energy  targets (14)  proposed  in  July  2021  by 
the  European  Commission  and  the  objectives 
outlined 
REPowerEU 
Communication (15). This  includes  adopting  a 
long-term strategic framework consistent with 
the  EU’s  climate  targets,  ensuring  long-term 
predictability  of  support  schemes,  addressing 

the 

in 

(14)  Preliminary calculations show a 31% RES share to be 
achieved by Poland by 2030 under a 40% EU target.   

(15)  COMMUNICATION FROM THE COMMISSION TO THE 

EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE 
COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS, 
“REPowerEU: Joint European Action for more affordable, 
secure and sustainable energy", EUR-Lex - 
52022DC0108 - EN - EUR-Lex (europa.eu)   

13 

to 

barriers 

regulatory 

infrastructural bottlenecks such as insufficient 
grid  capacity, 
improving  flexibility  though 
deployment  of  energy  storage  and  demand 
management,  reforming  consumer  tariffs  and 
RES 
removing 
deployment, namely reform of distancing rule, 
support  for  update  of  zoning  plans  and 
acceleration  of  permitting  process.  These 
in 
measures  would  accelerate 
renewable  energy 
in 
sources 
particular  onshore  wind  and  solar. Offshore 
wind  investments  should  be  accelerated  by 
participating  in  joint  and  hybrid  projects  and 
adapting  the  relevant  legal  framework,  for 
example allowing projects also in the territorial 
waters. 

investment 
including 

in 

industrial 

hard-to-abate 

Poland  needs  to  unlock  the  potential  of 
low  and  zero-carbon  fuels.  Accelerated 
investment 
renewables  would  enable 
stepping up renewable hydrogen generation to 
foster  decarbonisation  of  the  transport  sector 
and 
sectors. 
Moreover, Poland has an untapped potential to 
produce  sustainable  biomethane  that  could 
replace  natural  gas  in  several  applications. 
However,  unlocking  this  potential  requires 
increasing investments and a more favourable 
regulatory  framework.  In  this  respect,  the 
planned  expansion  of  gas 
infrastructures 
should  allow  for  the  use  of  low-carbon  and 
renewable gases.  

Public 

challenges. 

The  high  energy  intensity  of  the  Polish 
economy  and  the  poor  energy  efficiency 
of buildings generate social and economic 
costs.  These  include  air  pollution,  energy 
poverty,  dependency  on  energy 
imports, 
vulnerability  to  market  shocks  and  economic 
and 
competitiveness 
residential  buildings  often  have  low  technical 
standards  and  approximately  70%  of  houses 
are  poorly  insulated.  The  energy  efficiency 
efforts  outlined  in  the  Polish  National  Energy 
and  Climate  Plan  for  2030  remain  of  modest 
ambition compared to what would be needed. 
To step up action on energy efficiency, Poland 
needs to prioritise energy efficiency objectives 
in  spending  plans  and  investment  support 
schemes, in line with the newly adopted long-
renovations  strategy.  The 
term  buildings 
support  schemes  should  also  be  streamlined 
and  better  targeted,  notably  with  respect  to 

050010001500200025003000PolandEU-27g CO2-eq. / EUR202020051990 
   
                                                 
Graph 2.3: National emissions of greenhouse 
gases for 2019 by source categories 

Source: Poland's National Centre for Emissions 
Management (KOBiZE) 

road 

production,  wit 

Decarbonising  the  transport  sector  will 
be  key  for  reducing  emissions  and  fossil 
fuel  import  dependency  on  Russia,  but 
challenges  remain  for  the  development 
and  use  of  sustainable  modes  of 
transport. GHG emissions from the transport 
sector  have  quadrupled  between  1990-2019. 
The  sector  is  the  second  most  polluting  after 
energy 
transport 
responsible for the lion share of the emissions. 
A  modal  shift  away  from  private  road 
transport  to  less  polluting  modes  such  as  rail 
and  public  transport  will  thus  be  key  for 
reducing emissions. However, the share of rail 
transport  in  the  transport  of  goods  continues 
to  decrease.  Passenger  rail  is  in  many  areas 
not  an  attractive  alternative  to  private  cars 
due  to  a  low  frequency  of  operations  and  an 
insufficient  integration  with  other  transport 
modes.  The  modernisation  of railway  lines in 
Poland  to  TEN-T  standards  is  still  lagging 
behind  due  to  deficiencies  in  implementation 
transport 
of 
outside of urban areas is in decline for recent 
years,  whereas  all  segments  of  public 
reduced 
suffered 
transport  have 
passenger turnover and revenues on a back of 
the COVID-19 pandemic. Excessive number of 
road fatalities entails the need for more focus 
on stricter enforcement, education campaigns, 
and the safety infrastructure development.  

investment  projects.  Public 

from 

low-income  households  and  worst-performing 
buildings and should incentivise deeper energy 
efficiency, promote deeper energy savings and 
faster  electrification  of  heating  to  avoid 
natural  gas  lock-in. A  significant  reduction  of 
building’s  energy  demand  through  renovation, 
higher  deployment  of  energy  efficient 
products,  heat  pumps  and  renewable  energy 
for  heating  and  cooling  will  have  an 
immediate  and  durable  impact  in  protecting 
households  against  the  volatility  of  energy 
prices,  in  diminishing  inland  consumption  and 
import dependency. 

Air  quality  is  among  the  worst  in  the 
Union,  posing  major  environmental  and 
health concerns. Available evidence confirms 
persisting  significant  number  of  premature 
deaths  per  year  in  Poland  can  be  associated 
with  air  pollution (16).  With  cleaner  air  thanks 
to  the  energy  transformation,  Poland  can 
significantly reduce this number. This pollution 
comes  to  a  large  extent  from  individual 
heating  sources  in  residential  buildings  and 
from road congestion in urban areas. Around 3 
million  inefficient  and  polluting  boilers  need 
replacement  as  part  of  wider  measures 
targeting the  energy  efficiency  of  buildings in 
line with the Renovation Wave strategy.  

(16)  Current EEA figure for PM, O3 and NOx 

https://www.eea.europa.eu/media/newsreleases/many-
europeans-still-exposed-to-air-pollution-
2015/premature-deaths-attributable-to-air-pollution 

14 

82.38%6.18%8.38%3.07%EnergyIndustrial Processes and Product UseAgricultureWaste 
                                                 
   
KEY FINDINGS 
KEY FINDINGS 

Poland  would  benefit  from  measures  in 
the following areas: 

  Improving the efficiency of public spending 
and  increasing  the  transparency  of  public 
finance. 

  Reforming the pension system in particular 
by  extending  the  effective  retirement  age 
pension 
and 
schemes.  

preferential 

reforming 

  Addressing  disparities  in  labour  market 
quality 

participation 
and 
education and demand-driven skills. 

fostering 

  Improving  the  resilience,  accessibility  and 
system, 
to  

the  health 
increased  access 

effectiveness  of 
including 
through 
e-health services. 

  Strengthening  the  collaboration  between 
improve 

business 

and 

to 

research 
innovation. 

  Enhancing 

further 

digitalisation 

of 
businesses  and  public  administration, 
including 
of 
appropriate infrastructure. 

development 

through 

  Significantly  accelerating  investments  in 
decarbonisation, energy transformation and 
sustainable transport. 

  Enhancing 
the 
particular 
by 
independence.  

investment  climate, 

safeguarding 

in 
judicial 

  Ensuring  effective  public  consultations  and 
involvement of social partners in the policy-
making process. 

15 

 
 
 
ANNEXES 

 
 
 
LIST OF ANNEXES 

Cross-cutting progress indicators 

Annex 1: Sustainable Development Goals 

Annex 2: Recovery and Resilience Plan - implementation 

Annex 3: Other EU instruments for recovery and growth 

Annex 4: Progress in the implementation of country-specific recommendations 

Environmental sustainability 

Annex 5: Green Deal 

Annex 6: Employment and social impact of the green transition 

Productivity 

Annex 7: Resource efficiency and productivity 

Annex 8: Digital transition 

Annex 9: Innovation 

Annex 10: Industry and single market 

Annex 11: Public administration 

Fairness 

Annex 12: Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

Annex 13: Education and skills 

Annex 14: Health and health systems 

Annex 15: Economic and social performance at regional level 

Macroeconomic stability 

Annex 16: Key financial sector developments 

Annex 17: Taxation 

Annex 18: Key economic and financial indicators 

Annex 19: Debt sustanainability analysis 

LIST OF TABLES 

Table A1.1: 
Table A4.1: 
Table A5.1: 
Table A7.1: 
Table A8.1: 
Table A9.1: 
Table A10.1: 

Progress towards SDGs in Poland in the last five years 
Summary table on 2019, 2020 and 2021 CSRs 
Indicators underpinning the progress on EU Green Deal from macroeconomic perspective 
Selected resource efficiency indicators 
Key Digital Economy and Society Index Indicators 
Key research, development and innovation R&D&I indicators 
Key Single Market and Industry indicators 

19 

21 

21 

23 

24 

26 

29 

29 

33 

35 

35 

37 

39 

41 

44 

46 

46 

48 

50 

52 

55 

55 

56 

58 

59 

22 
27 
32 
36 
38 
40 
42 

 
 
 
Table A11.1: 
Table A12.1: 
Table A13.1: 
Table A14.1: 
Table A15.1: 
Table A16.1: 
Table A17.1: 
Table A18.1: 
Table A19.1: 
Table A19.2: 

Public administration indicators – Poland 
Social Scoreboard for Poland 
EU-level targets and other contextual indicators under the European Education Area strategic framework 
List of key indicators, health 
Poland, selected indicators at regional level 
Financial soundness indicators 
Indicators on taxation 
Key economic and financial indicators 
Debt sustainability analysis for Poland 
Heat map of fiscal sustainability risks for Poland 

LIST OF GRAPHS 

Graph A3.1: 

2014-2020 European Investment and Structural Funds - total budget by fund (EUR billion, %) 

Graph A3.2: 

Cohesion policy contribution to the SDGs (EUR billion) 

Graph A4.1: 

Poland's progress on the 2019-2020 CSRs (2022 European Semester cycle) 

Graph A5.1: 

Fiscal aspects of the green transition 

Graph A5.2: 

Thematic – Energy 

Graph A5.3: 

Thematic – Biodiversity 

Graph A5.4: 

Thematic – Mobility 

Graph A6.1: 

Fair green transition challenges 

Graph A6.2: 

Energy poverty by income decile Thematic focus on energy poverty 

Graph A7.1: 

Municipal waste treatment 

Graph A11.1: 

E-government benchmark scores and (lhs) and e-government users (rhs)Graph A11.1: E-government benchmark 

scores and (lhs) and e-government users (rhs) 

Graph A11.2: 

Scope Index of Independent Fiscal Institutions 

Graph A13.1: 

Figure 13.1. Participation in early childhood education by age, 2015-2019 (%) 

Graph A14.1: 

Life expectancy at birth, years 

Graph A14.2: 

Projected increase in public expenditure on healthcare over 2019-2070 (reference scenario) 

Graph A15.1: 

Territories most affected by the climate transition in Poland 

Graph A15.2: 

Innovation performance in Poland 

Graph A17.1: 

Tax wedge indicators 

45 
46 
49 
51 
54 
55 
56 
58 
59 
60 

24 

24 

26 

29 

30 

30 

31 

34 

34 

36 

44 

44 

48 

50 

50 

52 

53 

57 

20 

 
 
 
 
CROSS-CUTTING PROGRESS INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

below average, for instance as regards healthy life 
years at birth (62.5 years in 2019, compared with 
the  EU  average  of  64.6  years).  Some  indicators 
under  SDG  5  (gender  equality)  have  worsened, 
such  as  the  gender  employment  gap,  taking 
Poland further below the EU average for this SDG. 

Poland  is  performing  very  well  on  most 
indicators  related  to  productivity  (SDG  4,  8) 
and  is  improving  on  SDG  9.  Poland  had  real 
GDP per capita of EUR 12 700 in 2020, well below 
the  EU  average  of  EUR  26  380.  Expenditure  on 
R&D  has  increased  since  2015,  but  remains  low 
(1.39% of GDP in 2020, EU: 2.32%). Despite some 
progress since 2015, adult participation in learning 
remains low at only  3.7% compared with 9.2% in 
the  EU.  In  Poland,  the  proportion  of  households 
with  high-speed  internet  connections  in  2020 
(64.6  %)  is  well  above  the  EU  average  (59.3  %) 
and 
this 
represents  significant  progress  on 
indicator since 2015 (9.0 % in 2015, EU: 21.9 %). 
Strengthening digital skills remains a challenge.  

Poland is performing very well on some SDG 
indicators  for  macroeconomic  stability  (SDG 
8)  and  is  improving  on  SDG  16.  According  to 
indicators  related  to  decent  work  and  economic 
growth,  Poland’s  status  is  in  line  with  the  EU 
average, but it is lagging behind on peace, justice 
and strong institutions. More specifically, real GDP 
per  capita  in  Poland  has  been  steadily  increasing 
over  the  past  decade,  standing  at  76%  of  the  EU 
average  in  2020  (up  from  63%  in  2010).  The 
investment  share  of  GDP  declined  markedly  from 
20.1%  in  2015  to  16.6%  in  2020,  which  is 
substantially below the EU average of 22.3%. The 
employment  rate  has  been  increasing  steadily, 
reaching  73.6%  of  the  population  aged  20-64  in 
2020,  and  surpassing  the  EU  average  (72.4%  in 
2020).  In  parallel,  the  long-term  unemployment 
rate  has  been  falling  (to  only  0.6%  in  2020), 
considerably  below  the  EU  average  (2.4%  in 
2020). 

of 

four 

dimensions 

This Annex assesses Poland’s progress on the 
Sustainable Development Goals (SDGs) along 
the 
competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change,  while 
ensuring that no one is left behind. The EU and its 
Member  States  are  committed  to  this  historic 
global  framework  agreement  and  to  playing  an 
active  role  in  maximising  progress  on  the  SDGs. 
The graph below is based on the EU SDG indicator 
set  developed  to  monitor  progress  on  SDGs  in  an 
EU context. 

related 

indicators 

some  SDG 

While Poland is performing very well or well 
on 
to 
environmental sustainability (SDG 7, 11) and 
is improving on others (SDG 9, 12, 13, 15), it 
still  needs  to  catch  up  on  SDG  2.  Poland  has 
untapped  potential 
in  reaping  the  economic 
opportunities  related  to  innovation  and  clean 
energy  (SDG  7,  9).  In  particular,  although  the 
proportion  of  renewable  energy  has  increased 
from  11.6%  to  15.3%,  it  remains  below  the  EU 
average  of  22.1%.  Energy  productivity  increased 
slightly  more,  in  absolute  terms,  than  the  rest  of 
the  EU  (from  4.23  to  4.7  EUR/kgoe (17)  compared 
with  the  EU  from  7.8  to  8.6  EUR/kgoe).  However, 
the overall productivity remains significantly below 
the  EU  average.  Addressing  ‘Climate  action’  (SDG 
13),  Poland  has  achieved  some  progress  on  the 
proportion  of  renewable  energy  in  total  energy 
consumption, which increased from 11.9% in 2015 
to 16.1% in 2020, but is still outperformed by the 
EU 2020 average of 22.09% in 2020. 

Poland  is  performing  very  well  on  several 
SDG indicators related to fairness (SDG 1, 4, 
8, 10) and is improving on SDG 3, but it still 
needs to catch up on others (SDG 2, 5). Poland 
outperforms  the  EU  average  and  continues  to 
improve  in  several  indicators  related  to  poverty 
and  inequalities  (SDGs  1  and  10).  These  include  
the proportion of the population at risk of poverty 
or social exclusion, which decreased from 22.5% in 
2015  to  17.0%  in  2020,  compared  with  the  EU 
average of 21.9%. Poland is progressing on SDG 3 
regarding good health and well-being but remains 

(17)  Kilograms of oil equivalent 

21 

 
 
                                                 
 
 
 
 
 
Table A1.1: Progress towards SDGs in Poland in the last five years 

For detailed datasets on the various SDGs see the annual ESTAT report ‘Sustainable development in the European Union’, 
https://ec.europa.eu/eurostat/web/products-statistical-books/-/KS-03-21-096; Extensive country specific data on the short-term 
progress of Member States can be found here: Key findings - Sustainable development indicators - Eurostat (europa.eu).  
Source: Eurostat, latest update of 28 April 2022. Data mainly refer to 2015-2020 and 2016-2021. 

22 

 
 
 
 
 
 
ANNEX 2: RECOVERY AND RESILIENCE PLAN - IMPLEMENTATION 
ANNEX 2: RECOVERY AND RESILIENCE PLAN - IMPLEMENTATION 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the  centrepiece  of  the  European  Union’s 
efforts  to  support  its  recovery  from  the 
COVID-19  pandemic,  fast  forward  the  twin 
transition  and  strengthen  resilience  against 
future shocks. Poland submitted its Recovery and 
Resilience  Plan  (RRP)  on  3  May  2021.  The  plan 
amounts  to  a  total  of  EUR  35.4  billion,  of  which 
EUR 23.9 billion in grants, or 4.5% of Poland’s GDP 
in 2019, and EUR 11.5 billion in loans (out of EUR 
34.5 billion available).  

The  Commission  is  continuing  its  assessment  of 
the  Polish  plan  and  is  working  constructively  with 
the  Polish  authorities  to  ensure  it  meets  the 
criteria  laid  down  in  the  Recovery  and  Resilience 
Facility Regulation. 

23 

 
 
 
 
 
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The EU’s budget of more than EUR 1.2 trillion 
for  2021-2027  is  the  investment  lever  to 
help  implement  EU  priorities.  Underpinned  by 
an  additional  amount  of  about  EUR  800  billion 
largest 
through  NextGenerationEU  and 
instrument, the Recovery and Resilience Facility, it 
represents  significant  firepower  to  support  the 
recovery and sustainable growth. 

its 

support 

In  2021-2027,  EU  cohesion  policy  funds (18) 
will 
development 
long-term 
objectives  in  Poland  by  investing  EUR  78.9 
billion (19), including EUR 3.8 billion from the Just 
Transition  Fund  to  alleviate  the  socio-economic 
impacts  of  the  green  transition  in  the  most 
vulnerable  regions.  Partnership  agreements  and 
the  2021-2027  cohesion 
programmes  under 
policy  funds  take  into  account  the  2019-2020 
country-specific recommendations and investment 
guidance  provided  as  part  of  the  European 
Semester.  This  will  ensure  synergies  and 
complementarities  with  other  EU  funding. 
In 
addition, Poland will benefit from EUR 22.1 billion 
support for the 2023-27 period from the Common 
Agricultural 
social, 
environmental  and  economic  sustainability  and 
innovation 
rural  areas, 
contributing  to  the  European  Green  Deal,  and 
ensuring long-term food security. 

in  agriculture  and 

Policy,  which 

supports 

In  2014-2020,  the  European  Structural  and 
Investment Funds (ESI Funds) for Poland are 
set to invest EUR 90.8 billion (20) from the EU 
budget.  Total  investment  including  national 
financing  amounts  to  EUR  111  billion  (Graph 
3.1),  representing  around  3.4%  of  GDP  for  2014-
2020  and  64.1%  of  public  investment (21).  By  31 
December 2021, 96% of the total was allocated to 
specific  projects  and  64%  was  reported  as  spent, 
leaving EUR 40.4 billion to be spent by the end of 

(18)  European Regional Development Fund (ERDF), European 

Social Fund+ (ESF+), Cohesion Fund (CF), Just Transition Fund 
(JTF), Interreg. 

(19)  Current prices, source: Cohesion Open Data  

(20)  ESIF includes cohesion policy funds (ERDF, ESF+, CF, Interreg), 
European Agricultural Fund for Rural Development (EAFRD) 
and European Maritime and Fisheries Fund (EMFF). According 
to the ‘N+3 rule’, the funds committed for the years 2014-
2020 must be spent by 2023 at latest (by 2025 for EAFRD). 
Data source: Cohesion Open data, cut-off date 31.12.2021 
for ERDF, ESF+, CF, Interreg, cut-off date 31.12.2020 for 
EAFRD and EMFF.  

2023 (22).  Among  the  11  objectives,  the  most 
relevant ones for cohesion policy funding in Poland 
are network infrastructure in transport and energy 
with  EUR  27.9  billion,  low-carbon  economy  with 
EUR 11.8 billion, research and innovation with EUR 
9 billion and social inclusion with EUR 10.9 billion. 

Graph A3.1: 2014-2020 European Investment and 
Structural Funds - total budget by fund (EUR 
billion, %) 

(1) Billion EUR in current prices, % of total  
Source: European Commission, Cohesion Open Data  

Graph A3.2: Cohesion policy contribution to the 
SDGs (EUR billion) 

Source: European Commission, DG REGIO 

By  the  end  of  2020,  cohesion  policy  investments 
supported  the  creation  of  almost  3 000  new 
businesses,  and  over  28 000  new  direct  jobs.  An 
additional  12  million  people  benefited  from  flood 
protection  measures,  and  production 
from 
renewable sources increased by over 2 000MW. In 

(21)  Public investment is gross fixed capital formation plus 

(22)  Including REACT-EU. ESIF data on 

capital transfers, general government. 

https://cohesiondata.ec.europa.eu/countries/PL 

24 

27,2224%18,1816%0,711%49,0944%15,2214%0,591%CFEAFRDEMFFERDFESFYEI0,761,001,131,192,973,274,705,496,9413,5344,7202040SDG 12 Responsible consumption andproductionSDG 15 Life on landSDG 11 Sustainable cities andcommunitiesSDG 13 Climate actionSDG 1 No povertySDG 6 Clean water and sanitationSDG 3 Good health and well beingSDG 4 Quality educationSDG 7 Affordable and clean energySDG 8 Decent work and economicgrowthSDG 9 Industry, innovation,infrastructure 
 
                                                 
  
 
  
                                                 
 
benefited from the temporary 100% EU financing 
of  incurred  measures  in  cohesion  policy,  with 
approximately  EUR  1.8  billion  in  2021  through 
100% co-financing. 

for 

risks 

temporary 

unemployment 

support 
in 

Poland  received  support  under  the  European 
to 
instrument 
mitigate 
an 
emergency  (SURE)  to  finance  short-time 
work  schemes  and  similar  measures. In 
September  2020,  the  Council  granted  Poland 
financial assistance under SURE for a maximum of 
EUR  11.3  billion,  87%  of  which  was  disbursed  by 
29  March  2022.  SURE  is  estimated  to  have 
supported  approximately  20%  of  workers  and 
10%  of  firms  for  at  least  one  month  in  2020, 
trade, 
primarily 
construction,  and  professional,  scientific  and 
technical  activities.  Poland  is  estimated  to  have 
saved  a  total  of  EUR  0.4  billion  on  interest 
payments  as  a  result  of  SURE’s  lower  interest 
rates. 

in  wholesale 

retail 

and 

via 

the 

Technical 

The  Commission  provides  tailor-made  expert 
Support 
support 
Instrument, to help Poland design and implement 
growth-enhancing  reforms.  Since  2017,  Poland 
has  received  assistance  through  56  technical 
support projects. Projects delivered in 2021 aimed, 
for  example,  at  tackling  the  erosion  of  the  tax 
base  caused  by  an  inaccurate  application  of 
transfer  pricing  rules  or  implementing  Poland’s 
Capital  Market  Development  Strategy.  In  2022, 
new  projects  will  start  to  support,  among  others, 
the competitiveness of Poland’s railway sector and 
green  mobility,  and  the  development  of  digital 
competences.  

includes 

Poland  also  benefited  from  other  EU 
the  Connecting 
programmes.  This 
Europe Facility, which provided EU funding of EUR 
4.3  billion  to  specific  projects  on  strategic 
transport  and  energy  networks,  such  as  the  gas 
interconnectors  with  neighbouring  countries,  and 
Horizon  2020,  with  EU  funding  of  EUR  743.2 
million. 

addition, 6.3 million participants were supported in 
ESF  funded  projects,  under  which  more  than 
34 000  gained  a  qualification  and  more  than 
202 000  received  a  job  after  taking  part  in  a 
Youth Employment Initiative (YEI). 

Cohesion  policy  funds  already  substantially 
contribute  to  the  Sustainable  Development 
Goals  (SDGs).  In  Poland,  cohesion  policy  funds 
support  11  of  the  17  SDGs  with  up  to  95%  of 
expenditure  contributing  to  the  attainment  of  the 
goals.  

REACT-EU 

instrument 

The 
(Recovery 
Assistance  for  Cohesion  and  the  Territories 
of Europe) under NextGenerationEU provided 
EUR  1.5  billion  of  additional  funding  to 
Poland’s  cohesion  policy  allocations  for 
2014-2020.  This 
is  to  ensure  a  balanced 
recovery,  boost  convergence  and  provide  vital 
support  to  regions  following  the  coronavirus 
outbreak. REACT-EU provided support in Poland to 
bolster healthcare with EUR 461 million, support to 
SMEs  with  EUR  351  million,  EUR  317  million  are 
devoted 
investments, 
representing  20%  of  the  REACT-EU  resources  for 
Poland    and  EUR  305  million  (including  2022 
tranche)  to  supporting  digital  transition.  Digital 
projects  focused  on  support  for  territorial  self-
government  units  (Digital  community)  to  improve 
their IT tools and infrastructure, increase the level 
of  cybersecurity  and  provide  digital  training  for 
administrative staff. 

relevant 

climate 

to 

It 

The  Coronavirus  Response 
Investment 
Initiative (23) provided the first EU emergency 
support  to  Poland  in  relation  to  the  COVID-
19  pandemic. 
introduced  extraordinary 
flexibility enabling Poland to re-allocate resources 
for  immediate  public  health  needs  (EUR  1.4 
billion),  for  support  to  businesses  (EUR  124 
million)  and  for  remote  learning  (EUR  86  million). 
For instance, Poland shifted resources to purchase 
protective equipment and healthcare material with 
EUR 211 million and 550 000 SMEs received some 
EUR 493 million in support for working capital. By 
providing  relevant  equipment  or  connections, 
remote 
learning  projects  enabled  more  than 
335 000 pupils from more than 23 000 schools to 
learning.  Poland  also 
have  access  to  online 

(23)  Re-allocating ESIF resources according to Regulation (EU) 

2020/460 of the European Parliament and of the Council of 
30 March 2020, and Regulation (EU) 2020/558 of the 
European Parliament and of the Council of 23 April 2020. 

25 

 
                                                 
 
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 
RECOMMENDATIONS 

The  Commission  assessed  the  2019-2021 
country-specific  recommendations  (CSRs) (24) 
addressed  to  Poland  in  the  context  of  the 
European  Semester.  The  assessment  takes  into 
account  the  policy  action  taken  by  Poland  to 
date (25).  Overall  21%  of  the  CSRs  focusing  on 
structural issues in 2019 and 2020 have recorded 
at  least  “some  progress”,  while  75%  recorded 
“limited” or “no progress” (see Graph A4.1). 

Graph A4.1: Poland's progress on the 2019-2020 
CSRs (2022 European Semester cycle) 

Source: European Commission 

(24) 2021 CSRs: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A32021H0729%2821%29&qi
d=1627675454457 

2020 CSRs: EUR-Lex - 32020H0826(21) - EN - EUR-Lex 
(europa.eu) 

2019 CSRs: EUR-Lex - 32019H0905(21) - EN - EUR-Lex 
(europa.eu) 

(25)  Incl. policy action reported in the National Reform 

Programme. 

26 

No Progress17%Limited Progress58%Some Progress21%Substantial Progress 7% 
 
  
 
                                                 
 
 
 
Table A4.1: Summary table on 2019, 2020 and 2021 CSRs 

(Continued on the next page) 

27 

PolandAssessment in May 2022*2019 CSR1Some ProgressEnsure that the nominal growth rate of net primary government expenditure does not exceed 4.4% in 2020, corresponding to an annual structural adjustment of 0.6% of GDP. Not relevant anymoreTake further steps to improve the efficiency of public spending, including by improving the budgetary process.Some Progress2019 CSR 2Limited Progress Ensure the adequacy of future pension benefits and the sustainability of the pension system by taking measures to increase the effective retirement age and by reforming the preferential pension schemes. Limited ProgressTake steps to increase labour market participation, including by improving access to childcare and long-term care, and remove remaining obstacles to more permanent types of employment. Limited ProgressFoster quality education and skills relevant to the labour market, especially through adult learning.Limited Progress2019 CSR 3Limited ProgressStrengthen the innovative capacity of the economy, including by supporting research institutions and their closer collaboration with business. Limited ProgressFocus investment-related economic policy on innovationLimited Progress[Focus investment-related economic policy on] transport, notably on its sustainabilityLimited Progress[Focus investment-related economic policy on] digital [infrastructure]Some Progress[Focus investment-related economic policy on] energy infrastructureSome Progress[Focus investment-related economic policy on] healthcareLimited Progress[Focus investment-related economic policy on] cleaner energy, taking into account regional disparitiesLimited ProgressImprove the regulatory environment, in particular by strengthening the role of consultations of social partners and public consultations in the legislative process.No Progress2020 CSR1Limited ProgressTake 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. When economic conditions allow, pursue fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability, while enhancing investment. Not relevant anymoreImproveresilience,accessibilityandeffectivenessofthehealthsystem,includingbyprovidingsufficient resources and accelerating the deployment of e-health services. Limited Progress&  &  &  &&  &  &  &2020 CSR2Limited ProgressMitigate the employment impact of the crisis, in particular by enhancing flexible and short time working arrangements. Some ProgressBetter target social benefits and ensure access to those in need.No ProgressImprove digital skills. Limited ProgressFurther promote the digital transformation of companies and public administration. Some Progress2020 CSR 3Limited ProgressContinue efforts to secure access to finance and liquidity for companies. Substantial ProgressFront-load mature public investment projects Limited Progressand promote private investment to foster the economic recovery. No ProgressFocus investment on the green and digital transition, in particular on digital infrastructure, Limited Progressclean and efficient production and use of energy, Limited Progressand sustainable transport, Limited Progresscontributing to a progressive decarbonisation of the economy, including in the coal regions.Limited Progress2020 CSR 4No ProgressEnhance the investment climate, in particular by safeguarding judicial independence. No Progress 
 
 
 
  
 
Table (continued) 

Source: European Commission 

28 

Ensureeffectivepublicconsultationsandinvolvementofsocialpartnersinthepolicymakingprocess.No Progress2021 CSR1Limited ProgressIn2022,pursueasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilience Facility, and preserve nationally financed investment.Full ImplementationWheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscal positions and ensuring fiscal sustainability in the medium term.Some ProgressAtthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigital transition.Limited ProgressGiveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthandsocialprotectionsystemsforall.No Progress 
 
  
 
are  some  of  the  highest  in  the  EU  in  absolute 
terms  and  per  capita  and  amounted  to  EUR  5.6 
billion  in  2021.  So  far,  however,  Poland  has 
directed  only  some  50%  of  these  revenues  on 
average  to  climate  and  energy  projects,  despite 
ongoing  considerations  to  set  up  an  Energy 
Transformation  Fund,  funded  by  ETS  revenues. 
Meanwhile,  fossil  fuel  subsidies  showed  a  decline 
in the last couple of years, reversing the previous 
increasing  trend.  Budgetary  exposure  to  climate 
hazards (i.e. the climate risk to public finances due 
to  uninsured  assets)  is  considered  low/moderate. 
For more indicators on taxation (see Annex 18). 

Graph A5.1: Fiscal aspects of the green transition 

(1)  Taxation and government expenditure on environmental 
protection 
Source: EUROSTAT 

ENVIRONMENTAL SUSTAINABILITY 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 5: GREEN DEAL 
ANNEX 5: GREEN DEAL 

intends 

The  European  Green  Deal 
to 
transform the  EU  into a  fair and prosperous 
society,  with  a  modern,  resource-efficient 
and competitive economy where there are no 
net  emissions  of  greenhouse  gases  in  2050 
and  where  economic  growth  is  decoupled 
from resource use. This annex offers a snapshot 
of  the  most  significant  and  economically  relevant 
developments  in  Poland  in  the  respective  building 
blocks  of 
is 
complemented by Annex 6 on the employment and 
social impact of the green transition and Annex 7 
for circular economy aspects of the Green Deal. 

the  European  Green  Deal. 

It 

Significant efforts will be needed for Poland 
to  reach  its  2030  greenhouse  gas  emissions 
reduction target for sector outside the ETS. In 
the  last  two  decades,  Poland  has  made  limited 
progress  in  decarbonising  its  economy.  Compared 
with  1990  the  country’s  total  emissions  in  2020 
were  21%  lower,  while  compared  with  2005 
emissions in 2020 were only 8% lower. Emissions 
falling  under  the  EU  Emissions  Trading  System 
(ETS) decreased more slowly in Poland than in the 
EU  on  average.  Aside  from  a  coal-dependent 
energy  system,  road  transport  and  inefficient 
buildings are other sources of high GHG emissions. 
In  the  national  energy  strategy,  Poland  puts 
forward  an  indicative  target  of  30%  reduction  in 
total  greenhouse  gas  emissions  by  2030 
compared  with  1990.  The  strategy  respects  the 
greenhouse gas emissions mitigation laid down in 
the  integrated  national  energy  and  climate  plan 
(NECP),  which  puts  Poland  on  track  to  meet  its 
2030  European  emissions  reduction  target  only  if 
additional  measures  are  implemented.  Further 
efforts  will  be  needed  to  reflect  the  higher 
ambition  under  the  European  Green  Deal,  the 
Climate Law and the Fit for 55 package.   

While Poland’s revenues from environmental 
taxes are above the EU average, government 
investment  in  environmental  protection  and 
fossil  fuel  subsidies  are  not  performing  as 
strong. Poland’s tax revenues, both as a share of 
total tax revenues and a share of GDP, are higher 
than  the  EU  average,  with  energy  taxes  largely 
driving 
taxes.  A  small 
percentage also goes to taxes on transport and on 
pollution.  At  the  same  time,  however,  the  Polish 
government  spends  a  smaller  share  of 
its 
expenditure  on  environmental  protection  than  in 
the EU overall. Poland’s revenues from the EU ETS 

total  environmental 

29 

0.01.02.03.04.05.06.07.08.0Environmental taxes(% of GDP)Environmental taxes(% of total taxation)Governmentexpenditure onenvironmentalprotection (% of totalexpenditure)PL (2020)EU27 (2020) 
 
 
  
 
 
 
Graph A5.2: Thematic – Energy 

Share in energy mix (solids, oil, gas, nuclear, renewables) 
Share of renewables include waste 
The energy mix is based on gross inland consumption, and 
excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste. 
Source: EUROSTAT 

Poland  is  one  of  the  most  energy-  and 
emission-intensive  Member  States  in  the  EU 
and  its  energy  mix  is  still  very  much  reliant 
on fossil fuels. Poland has been decarbonising at 
the  second  slowest  rate  among  all  lower  income 
Member States; it registered only an 8% reduction 
in  total  GHG  emissions  since  2005  compared  to 
2020. In 2020, gross inland consumption of fossil 
fuels  (coal,  oil  and  natural  gas)  reached  86%. 
Poland overachieved its renewables target for the 
year  2020  (16.1%  vs  15%).  Renewable  sources 
generate  16.2%  of  electricity  and  22.1%  of  heat. 
The  NECP  puts  forward  a  national  contribution  of 
21-23%  from  renewable  energy,  which  is  below 
rate  set  down  in  Regulation  (EU)  2018/1999  of 
25%, and was therefore assessed as unambitious. 
Poland  has  made  internal  announcements  by 
which  it  would  gradually  phase  out  hard  coal 
mining by 2049. Poland’s energy policy up to 2040 
envisages  a  gradual  transition  away  from  coal 
with  no  more  than  56%  of  electricity  to  be 
generated  from  coal  in  2030  (in  a  scenario  with 
high  CO2  price  increases,  the  proportion  of  coal 
could fall to 37%). 

In  terms  of  biodiversity  and  ecosystem 
health,  Poland  presents  a  mixed  picture. 
Considering both Natura 2000 and other nationally 
designated  protected  areas,  Poland 
legally 
protects  around  40%  of  its  terrestrial  areas  and 
22.7%  of  marine  areas.  At  the  same  time,  the 
share  of  habitats  in  bad  conservation  status  has 
increased  to  35%  and  that  of  assessments  for 

species  in  bad  conservation  status  has  remained 
is 
stable  at  around  13%.  Organic  farming 
estimated at 3.52%, well below the EU average of 
9.07% in 2020. 

In  terms  of  pollution,  air  quality  in  Poland 
continues  to  give  cause  for  serious  concern. 
For  the  year  2020,  exceedances  above  EU  limit 
values were registered for nitrogen dioxide in two 
air  quality  zones  and  for  particulate  matter  (PM10 
and  PM2.5) 
in  16  and  2  zones  respectively. 
Furthermore,  for  several  air  quality  zones  the 
target  values  for  ozone  concentration  have  not 
been  met.  Persistent  breaches  of  air  quality 
requirements,  which  have  severe  negative  effects 
on health and the environment, are being followed 
through 
the  European  Commission 
up  by 
infringement  procedures  (mainly  over  PM10  and 
NO2 exceedances).  

Green  mobility  faces  challenges,  especially 
as  regards  road  passenger  transport. 
In 
Poland the market development for zero-emission 
passenger cars is lagging behind the overall trend 
in  the  EU.  However,  the  electrification  of  the 
railway  network  is  more  advanced  than  the 
average in the EU.   

Graph A5.3: Thematic – Biodiversity 

Terrestrial protected areas and organic farming 
For terrestrial protected areas data for 2018, and data for the 
EU average (2016, 2017) is lacking 
Source: EEA (terrestrial protected areas) and EUROSTAT 
(organic farming) 

30 

020406080100200520102015201820192020RenewablesNuclearGasOilSolid fossil fuels, peat and oil shale0510152025303540452016201720192020Terrestrial protected areas (% total area)Area under organic farming (% total utilised agriculturalarea)EU27 (terrestrial)EU27 (organic) 
  
 
   
 
Graph A5.4: Thematic – Mobility 

Share of zero emission vehicles (% of new registrations) 
Zero emission vehicles include battery and fuel cell electric 
vehicles (BEV, FCEV) 
Source: European Alternative Fuels Observatory 

31 

0.02.04.06.08.010.0201620172018201920202021% of new registrationsPLEU27 
  
 
Table A5.1: Indicators underpinning the progress on EU Green Deal from macroeconomic perspective 

(1) The 2030 non-ETS GHG target is based on the Effort Sharing Regulation. The F55 targets are based on the COM proposal to 
increase EU's climate ambition by 2030. Renewables and Energy Efficiency targets and national contributions under the 
Governance Regulation (Regulation (EU) 2018/1999). 
(2) Distance to target is the gap between Member States’ 2030 target under the Effort Sharing Regulation and projected 
emissions, with existing measures (WEM) and with additional measures (WAM) respectively, as a percentage of 2005 base year 
emissions. 
(3) Percentage of total revenues from taxes and social contributions (excluding imputed social contributions). Revenues from the 
ETS are included in environmental tax revenues. For reference, in 2017 ETS revenues amounted to 1.5% of total environmental 
tax revenues at the EU level. 
(4) Covers expenditure on “gross fixed capital formation” to be used for the production of environmental protection services (i.e. 
abatement and prevention of pollution) covering all sectors, i.e. government, industry and specialised providers. 
(5) The climate protection gap indicator is part of the European adaptation strategy adopted in (February 2021), and is defined as 
the share of non-insured economic losses caused by climate-related disasters. 
(6) Sulphur oxides (SO2 equivalent), Ammonia, Particulates < 10µm, Nitrogen oxides in total economy (divided by GDP). 
(7) Transportation and storage (NACE Section H). 
(8) Zero emission vehicles include battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV). 
(9) European Commission Report (2019) “Benchmarking smart metering deployment in the EU-28”. 
(10) European Commission (2021). Each year the DESI is re-calculated for all countries for previous years to reflect any possible 
change in the choice of indicators and corrections to the underlying data. Country scores and rankings may thus differ compared 
with previous publications. 
Source: Source: Eurostat, JRC, European Commission, EEA, EAFO 

32 

TargetTarget2005201920202030WEMWAM2030WEMWAMNon-ETS GHG emission reduction target (1)MTCO2 eq; %; pp (2)183.116%12%-7%-135-18%-24-6200520162017201820192020Share of energy from renewable sources in gross final consumption of energy (1)%7%11%11%15%15%16%21-23%Energy efficiency: primary energy consumption (1)Mtoe88.094.899.1104.1100.296.991.3Energy efficiency: final energy consumption (1)Mtoe58.566.670.974.973.771.167.1201520162017201820192020201820192020Environmental taxes (% of GDP)% of GDP2.72.72.72.72.52.62.42.42.2Environmental taxes (% of total taxation)% of taxation (3)8.28.17.97.77.27.16.05.95.6Government expenditure on environmental protection% of total exp.1.441.020.941.181.261.141.661.69-Investment in environmental protection% of GDP (4) 0.840.350.340.49--0.420.380.41Share of green bonds---------Fossil fuel subsidiesEUR2020bn1.511.852.712.121.670.9856.8755.7041.27Climate protection gap (5)score 1-4Net GHG emissions1990 = 100828488878384797669GHG emissions intensity of the economykg/EUR'100.960.960.950.900.820.800.320.310.30Energy intensity of the economykgoe/EUR'100.230.230.230.230.210.210.120.110.11Final energy consumption (FEC)2015=100100.0106.9113.8120.2118.4114.2103.5102.994.6FEC in residential building sector2015=100100.0104.5105.4118.5110.3110.9101.9101.3101.3FEC in services building sector2015=100100.0108.4102.6101.199.696.7102.4100.194.4Smog-precursor emission intensity (to GDP) (4)tonne/EUR'102.952.762.762.572.32-0.990.93-Years of life lost caused due to air pollution by PM2.5per 100.000 inh.14031364157015601291-863762-Years of life lost due to air pollution by NO2per 100.000 inh.5449546339-12099-Nitrate in ground watermg NO3/litre------21.720.7-Terrestrial protected areas% of total-38.339.8-39.639.6-25.725.7Marine protected areas% of total---------Organic farming% of total utilised agricultural 4.03.73.43.33.53.58.08.59.100-0606-1212-18Net land takeper 10,000 km213.011.05.0201520162017201820192020201820192020GHG emissions intensity of transport (to GVA) (7)kg/EUR'100.850.970.940.870.840.830.890.870.83Share of zero emission vehicles (8)% in new registrations0.00.00.10.10.30.81.01.95.32234676710Share of electrified railways%63.664.063.663.764.2-55.656.0-25.324.925.024.425.2-28.928.8-YearPLEUShare of smart meters in total metering points (9) - electricity% of total20188.335.8Share of smart meters in total metering points (9) - gas% of total20181.313.1ICT used for environmental sustainability (10)%202159.765.9Progress to policy targetsNational contribution to 2030 EU targetPOLANDEU'Fit for 55'DistanceDistanceDigitalFiscal and financialindicators1.6 out of 4 (slight increase from historical level of 1.5). This is a low/medium risk category (4 being a high risk).ClimateEnergyPollutionBiodiversity2000-20062006-20122012-20183.615.712.9MobilityNumber of plug-in electric vehicles per charging pointCongestion (average number of hours spent in road congestion per year by a representative commuting driver) 
 
  
 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 

As  for  the  social  dimension  of  the  green 
transition,  ensuring  access  to  transport  and 
energy appears overall less of a challenge in 
Poland.  A  slightly  higher  proportion  of  the 
population in rural areas is at risk of poverty (22% 
vs  18.7%  in  the  EU) (30).  The  share  of  the 
population  being  unable  to  keep  their  homes 
adequately  warm  decreased  significantly  from 
7.5% in 2015 to 3.2% in 2020, which is almost 2.5 
times  below  the  EU  average  (8.2%).  All  income 
groups  are  affected  (see  Graph  2).  Consumption 
patterns  vary  across  the  population:  the  average 
carbon  footprint  of  the  top  10%  of  emitters  is 
about  5.1  times  higher  than  that  of  the  bottom 
50% of the population (5.3 times in the EU).  

Tax  systems  are  key  to  ensuring  a  fair 
transition  towards  climate  neutrality (31). 
Poland’s  revenues  from  total  environmental  taxes 
reduced  slightly  from  2.6%  of  GDP  in  2015  to 
2.5% in 2019, and remained stable in 2020 (2.2% 
in  the  EU).  The  labour  tax  wedge  for  low-income 
earners (32)  remained  stable  at  34.3%  between 
2015  and  2019  (33.5%  in  2021),  compared  with 
31.9%  in  the  EU  in  2021  (see  Annex  18). 
Redistributive 
accompanying 
measures 
environmental  taxation  have  the  potential  to 
foster  progressive  measures  and  to  have  a 
positive  impact  on  the  disposable  income  of 
households,  with  Poland  having  (among)  the 
strongest  potential  positive  effects  on  the  first 
income decile (33). 

The  green  transition  not  only  encompasses 
environmental 
to 
improvements 
sustainability, but also includes a significant 
social  dimension. While  measures  in this  regard 
include the opportunity for sustainable growth and 
job creation, it must also be ensured that no one is 
left  behind  and  all groups  in  society  benefit  from 
the transition. Poland's green transition can benefit 
from  positive  trends,  promising  recent  policy 
measures  and  the  opportunities  offered  by  the 
green economy; at the same time energy-intensive 
sectors  are  sizeable  and,  to  some  extent,  lower-
income groups are likely to face challenges during 
the transition.  

The  economy  has  slightly  reduced  its carbon 
Though  key  energy-intensive 
footprint. 
sectors  remain  sizeable,  the  green  economy 
has  potential  for  growth  and  can  provide 
strong  potential  for 
job  creation.  The 
greenhouse  gas  (GHG)  emissions  intensity  of  the 
Polish  economy  decreased  slightly  between  2015 
and  2020  (in  terms  of  gross  value  added)  and 
stands  at  54%,  above  the  EU  average,  with  an 
average  carbon  footprint  per  worker  at  20.93 
tonnes of GHG emissions (13.61 tonnes in the EU) 
(see  Graph  1).  Coal  and  lignite  and  fossil  fuels-
based  energy  production  have  been  identified  as 
declining sectors (26); no transforming sector could 
be 
energy-intensive 
Poland's 
industry (27),  provides  jobs  for  5.42%  of  the  total 
employed workforce, a slight increase from 5.33% 
in  2015,  for  which  up-skilling  and  reskilling  could 
be  particularly  important  (see  Annex  15).  The 
environmental  goods  and services  sector provides 
jobs  to  a  comparatively  small  proportion  of  the 
employed population (1.4% vs 2.1% in the EU) (28). 
Wind  energy  potential  in  Poland  is  up  to  1  635 
MWh/km2 and solar energy potential up to 1 310 
efficiency 
MWh/km2. 
improvements could offer further opportunities for 
green jobs (29). 

Therefore, 

identified. 

energy 

(26)  SWD(2021) 275 final 

(27)  2020 European Semester: Overview of Investment Guidance 
on the Just Transition Fund 2021-2027 per Member State 
(Annex D)  

(28)  There is currently no common EU-wide definition of green 
jobs. Accounts for the environmental goods and services 
sector only report on an economic sector that generates 
environmental products, i.e. goods and services produced for 
environmental protection or resource management. 

(29)  https://publications.jrc.ec.europa.eu/repository/handle/ 

JRC126047 

(30)  Based on COM(2021) 568 final (Annex I) as a proxy for 

potential transport challenges in the context of the green 
transition (e.g. due to vulnerability to fuel prices).  

(31)  COM(2021) 801 final. 

(32)  Tax wedge for a single earner at 50% of the national 
average wage (Tax and benefits database, European 
Commission/OECD). 

(33)  SWD(2021) 641 final PART 3/3. 

33 

 
 
                                                 
                                                 
 
Graph A6.1: Fair green transition challenges 

(1) Numbers are the normalised indicator performance, 
signifying factors relative to the EU27 average. Carbon 
inequality average emissions per capita 10% vs bottom 50% 
(2019) 
Source: Eurostat, World Inequality Database 

Graph A6.2: Energy poverty by income decile 
Thematic focus on energy poverty 

HH050: Ability to keep home adequately warm 
HY020: Total disposable household income 
Source: Eurostat EU-SILC survey (2020) 

34 

0.000.501.001.502.002.503.003.504.00GHG_GVA(MS/EU)GHG_worker(MS/EU)Empl_share_EII(MS/EU)AROP_rural(MS/EU)Energy_poverty(MS/EU)Carbon_inequality(MS/EU)PolandEU 2020Poland 20150%5%10%15%20%25%12345678910PolandEuropean Union 
  
 
   
 
 
 
PRODUCTIVITY 
PRODUCTIVITY 
ANNEX 7: RESOURCE EFFICIENCY AND PRODUCTIVITY 
ANNEX 7: RESOURCE EFFICIENCY AND PRODUCTIVITY 

The  green  transition  not  only  encompasses 
improvements 
environmental 
to 
sustainability, but also includes a significant 
social  dimension. While  measures  in this  regard 
include the opportunity for sustainable growth and 
job creation, it must also be ensured that no one is 
left  behind  and  all groups  in  society  benefit  from 
the transition.  

On  circular  economy  Poland  has  a  long  way 
to  go.  The  circular  (secondary)  use  of  material 
was 10.2% in 2016 and 9.9% in 2020. Thus, there 
has  been  a  decline  in  secondary  material  usage 
over  recent  years  and  the  gap  between  Poland’s 
performance  and  the  EU  average  of  12.8%  has 
widened.  In  2019,  the  Polish  Council  of  Ministers 
adopted  the  Roadmap  for  Transformation  to  a 
Circular Economy, but there has been no progress 
since. 

Resource  productivity  in  Poland  is  below the 
EU average. Resource productivity expresses how 
efficiently the economy uses material resources to 
produce  wealth.  Improving  resource  productivity 
can  help  minimise  negative 
impacts  on  the 
environment  and  reduce  dependency  on  volatile 
raw material markets. With 1.31 purchasing power 
standards  (PPS)  generated  per  kg  of  material 
consumed in 2020, resource productivity in Poland 
falls behind the EU average of 2.23 PPS per kg. 

Effective  waste  management  has  been  a 
challenge for Poland for many decades. After 
a  downward  trend,  municipal  waste  generation  in 
Poland  has  started  to  increase  in  recent  years, 
reaching 336 kg per capita in 2019, although this 
value  is  still  well  below  the  EU  average  of  501kg 
per capita. After an initial decrease in the first half 
of the last decade, Poland’s landfill rate has gone 
up  again  over  the  last  three  years,  reaching  43% 
in  2019  (which  is  far  above  the  EU  average  of 
24%). This means that landfilling and incineration 
(23%)  remain  the  predominant  forms  of  waste 
treatment. Poland is also not on track to meet the 
EU 2020 and 2025 recycling targets with 38.7% in 
2020, below the EU average of 47.8%. 

Whilst  not  being  a  leader  in  environmental 
technology,  Poland  performs  above  average 
in  the  circular 
as  regards  employment 
economy and value-added at factor cost. 

35 

 
 
 
 
 
Graph A7.1: Municipal waste treatment 

Source: Eurostat 

Table A7.1: Selected resource efficiency indicators 

Source: Eurostat 

36 

SUB-POLICY AREA201520162017201820192020EU27 CircularityResource Productivity (Purchasing power standard (PPS) per kilogram)1.21.21.21.21.31.32.22020Material Intensity (kg/EUR)0.80.90.90.90.80.70.42020Circular Material Use Rate (%)11.610.29.99.810.39.912.82020Material footprint (Tones/capita)16.517.218.818.818.2-14.62019Waste Waste generation (kg/capita, total waste)-4793-4612--52342018Landfilling (% of total waste treated)-28.0-26.4--38.52018Recycling rate (% of municipal waste)32.534.833.834.334.138.747.82020Hazardous waste (% of municipal waste)-1.1-2.2--4.32018CompetitivenessGross value added in environmental goods and services sector (% of GDP)2.22.42.32.22.6-2.32019Private investment in circular economy (% of GDP)0.20.20.20.1--0.12018Key indicators - Poland Latest year EU 272863073153293363460100200300400500600201520162017201820192020Kg per capita Landfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU 27 
 
 
 
  
 
  
ANNEX 8: DIGITAL TRANSITION 
ANNEX 8: DIGITAL TRANSITION 

The Digital Economy and Society Index (DESI) 
monitors EU Member States’ digital progress. 
The  areas  of  human  capital,  digital  connectivity, 
the 
technologies  by 
businesses  and  digital  public  services  reflect  the 
Digital  Decade’s  four  cardinal  points (34).  This 
Annex describes Poland’s DESI performance.  

integration  of  digital 

The  low  level  of  basic  digital  skills  is  a  key 
challenge  for  Poland  in  the  human  capital 
dimension.  Poland  scores  below  the  EU  average 
in  at  least  basic  digital  skills  and  ICT  specialists 
account for a lower percentage of the workforce in 
Poland  than  the  EU  average.  The  percentage  of 
female  ICT  specialists  is  also  below  the  EU 
average. 

Poland  has  a  mixed  performance  in  the 
indicators  for  digital  connectivity.  The  very 
high  capacity  networks  (VHCN)  are  at  the  EU 
average,  while  5G  technology  is  available  in  34% 
of  the  country,  scoring  considerably  below  EU 
average.  No  harmonised  radio  spectrum  for  5G 
deployment has yet been assigned. 

In  the  integration  of  digital  technology, 
Poland  is  still  far  below  the  EU  average  for 
most indicators. The proportion of SMEs with at 
least  a  basic  level  of  digital  intensity  is  much 
lower  than  the  EU  average.  The  adoption  of 
advanced  digital  technologies is  also  considerably 
below the EU average for big data solutions, cloud, 
and artificial intelligence.  

Poland is still underperforming in the digital 
public  services  dimension  of  DESI.  Poland 
scores below the EU average on the availability of 
digital  online  services,  for  digital  services  for 
citizens even more than for businesses. 

(34)  2030 Digital Compass: the European Way for the Digital 

Decade Communication, COM (2021) 118 final 

37 

 
 
                                                 
 
Table A8.1: Key Digital Economy and Society Index Indicators 

* The 5G coverage indicator does not measure user’s experience, which may be affected by a variety of factors such as the type 
of device used, environmental conditions, number of concurrent users and network capacity. 5G coverage refers to the percentage 
of populated areas as reported by operators and national regulatory authorities. 
Source: Digital Economy and Society Index 

38 

EUEU top-performanceHuman capitalDESI 2020DESI 2021DESI 2022DESI 2022DESI 2022At least basic digital skillsNANA43%54%79%% individuals202120212021ICT specialists3.1%3.4%3.5%4.5%8.0%% individuals in employment aged 15-7420192020202120212021Female ICT specialists14%15%16%19%28%% ICT specialists20192020202120212021ConnectivityFixed Very High Capacity Network (VHCN) coverage60%65%70%70%100%% households201920202021202120215G coverage*NA10%34%66%99.7%% populated areas2020202120212021Integration of digital technologySMEs with at least a basic level of digital intensityNANA40%55%86%% SMEs202120212021Big data8%8%8%14%31%% enterprises20182020202020202020CloudNANA19%34%69%% enterprises202120212021Artificial IntelligenceNANA3%8%24%% enterprises202120212021Digital public servicesDigital public services for citizensNANA5775100Score (0 to 100)202120212021Digital public services for businessesNANA7082100Score (0 to 100)202120212021Poland 
 
 
 
   
 
ANNEX 9: INNOVATION 
ANNEX 9: INNOVATION 

Innovation  Scoreboard (35).  While 

This  Annex  provides  a  general  overview  of 
the  performance  of  Poland’s  research  and 
innovation  system.  Poland 
is  an  emerging 
innovator  according  to  the  2021  edition  of  the 
its 
European 
innovation  performance  has  improved  over  the 
last decade, the gap with the EU average remains 
significant. R&D intensity reached 1.39% of GDP in 
2020,  continuing  the  clear  upward  trend  since 
2016 (1% of GDP in 2015), but remains below EU 
average. 

decreasing  number  of  Patent  Cooperation  Treaty 
(PCT)  patent  applications  (per  billion  GDP  in  PPS), 
which decreased  between 2017 and 2019. 

the 

has 

been 

to  produce  scientific 
Poland  continues 
outputs  of  modest  quality  and  struggles  to 
foster  science-business  cooperation.  The 
proportion  of  the  country’s  scientific  publications 
top  10%  most  cited  scientific 
among 
publications  worldwide 
steadily 
increasing  since  2010  (5.0%  in  2018,  compared 
with  2.9%  in  2010),  but  remains  below  the  EU 
average  (9.9%  in  2018).  The  relevant  reforms 
under  the  2018  Act  on  Higher  Education  are 
expected  to  further  influence  this  development. 
Similar  patterns  are  also  visible  regarding  public-
private  scientific  co-publications  as  percentage  of 
the  total  number  of  publications  (5%  in  2020 
compared with the EU  average of 9.05% in 2020 
and 4% for Poland in 2015). 

The  framework  conditions  for  businesses  to 
innovate  and  invest  in  R&D  require  further 
improvement.  R&D  expenditure  of  businesses 
rose  to  0.87%  of  GDP  in  2020  compared  with 
0.47%  in  2015,  while  remaining  significantly 
below  the  EU  average  (1.53%).  Public  sector 
support for private R&D investment has increased 
consistently,  reaching  0.17%  of  GDP  in  2019  (EU 
average 0.196%), compared with 0.082% in 2015, 
driven  to  a  small  extent  by  increases  in  R&D  tax 
incentives  (foregone  revenues  as  percentage  of 
GDP).  The  availability  of  venture  capital  has 
increased to 0.016% of GDP (EU average 0.054%), 
in  line  with  the  positive  development  of  previous 
years. On the downside, skills shortages are visible 
in  the  numbers  of  new  graduates  in  science  and 
engineering which decreased in recent years (13.8 
in  2019  compared  with16.5 
in  2015  -  per 
thousand population aged 25-24). Skills shortages 
and other factors might further hamper the take-
up  of  innovations,  as  can  already  be  seen  in  the 

(35)  2021 European Innovation Scoreboard, Country profile: 

Poland 
https://ec.europa.eu/docsroom/documents/45914/attachment
s/1/translations/en/renditions/native  

39 

 
 
                                                 
 
Table A9.1: Key research, development and innovation R&D&I indicators 

Source: DG Research and Innovation - Common R&I Strategy and Foresight Service - Chief Economist Unit 
Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe 

40 

CompoundEUannual growthaverage2010-20R&D Intensity (GERD as % of GDP)0.721.001.211.321.396.882.32Public expenditure on R&D as % of GDP0.530.530.410.490.51-0.20.78Business enterprise expenditure on R&D (BERD) as % of GDP0.190.470.800.830.8716.41.53Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 2.94.25.0::7.29.9PCT patent applications per billion GDP (in PPS)0.40.70.5::1.0 3.5Public-private scientific co-publications as % of total publications3.24.04.64.85.04.49.05New graduates in science & engineering per thousand pop. aged 25-3415.916.514.613.8:-2.616.3Total public sector support for BERD as % of GDP0.0300.0820.1570.170:21.20.196R&D tax incentives: foregone revenues as % of GDP::0.0150.018:104.30.100Share of environment-related patents in total patent applications filed under PCT (%) 11.714.0  8.2: :  -4.312.8 Venture Capital (market statistics) as % of GDP0.070.060.090.0120.0169.00.054Employment in fast-growing enterprises in 50% most innovative sectors6.35.86.86.7:0.85.52020Poland2010201520182019Finance for innovation and Economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation  
 
  
 
 
ANNEX 10: INDUSTRY AND SINGLE MARKET 
ANNEX 10: INDUSTRY AND SINGLE MARKET 

perspectives  for 
investment.  Uncertainty  also 
affects  public  procurement  procedures:  Poland 
registers  the  highest  proportion  of  contracts 
awarded to a single bidder (51%) in the EU, a sign 
of low competition.  

instruments 

Poland  offers  multiple 
to 
support SMEs’ access to finance, both at the 
national  and  at  the  regional  level.  The  Polish 
banking  system  is  characterized  by  high  stability 
and  safety.  However,  according  to  the  last  SAFE 
study  2021, 14%  of  the  loans  were  rejected,  one 
of  the  highest  ratios  in  the  EU  and  the  share  of 
SMEs  experiencing  late  payments  in  the  past  six 
months  increased  to  65.5%,  well  above  the  EU 
average  of  45%.  Venture capital markets  are  still 
underdeveloped.  

prosperity,  well-being 

Productivity  growth  is  a  critical  driver  of 
and 
economic 
convergence over the long run. A major source 
of  productivity  for  the  EU  economy  is  a  well-
functioning single market, where fair and effective 
competition  and  a  business  friendly  environment 
are  ensured, 
in  which  small  and  medium 
enterprises  (SMEs)  can  operate  and  innovate 
without  difficulty.  Businesses  and  industry  rely 
heavily  on  robust  supply  chains  and  are  facing 
bottlenecks that bear a negative impact on firms’ 
productivity 
levels,  employment,  turnover  and 
entry/exit  rates.  This  may  impact  the  Member 
States’  capacity  to  deliver  on  Europe’s  green  and 
digital transformation. 

to 

low 

leading 

in  Poland 

is 
The  business  environment 
characterized  by  high  uncertainty  and 
instability, 
levels  of 
investment.  Fostering  a  stable  and  predictable 
regulatory  framework  by  diminishing  burdensome 
administrative  requirements  and  procedures  and 
frequent  changes  to  key  laws  (in  e.g.,  taxation, 
social security contributions, energy policies) would 
build  a  more  resilient  economy.  According  to  the 
latest  edition  of  the  Survey  on  the  Access  to 
Finance 
of 
respondents  indicated  regulation  as  the  most 
important  problem  that  their  business  is  facing 
(versus only 11 % in the EU).  

(SAFE),  18 % 

Enterprises 

of 

but 

also 

(18.5%) 

average 

(24.6%), 

in  GDP 

investment 

is  devoted 

investment 

low  private 

rate  can 
The 
negatively 
influence  Poland’s  economic 
recovery  and  its  ability  to  transition  into  a 
more  knowledge-based  economy.  Poland’s 
is 
share  of 
systematically  low,  not  only  in  comparison  to  the 
EU 
against 
neighbouring,  peer  countries  (CZ,  HU,  and  SK).  In 
to 
investment 
addition,  much 
infrastructure  investment  (in  Poland  70%,  EU 
average  43 %)  rather  than 
intangible  assets 
weighing  on  productivity  and  decreasing  future 
growth  potential.  As  a  percentage  of  GVA,  Poland 
invests  in  intangible  assets  less  than  a  half  of 
what  is  invested  by  Hungary  and  around  a  third 
compared  to  the  Czech  Republic.  Ensuring  equal 
treatment  of 
economic  operators  by  an 
independent  judiciary  is  essential  for  a  solid 
investment  climate.  Its  lack  thereof  poses  a  risk.  
As shown in the graph below, in 2021 just 25% of 
Polish  companies  were  confident 
their 
investments  were  protected  by  national  law  and 
courts vs an EU average of 56%.The absence of a 
Recovery  and  Resilience  Plan  only  worsens  future 

that 

41 

 
 
 
Table A10.1: Key Single Market and Industry indicators 

(Continued on the next page) 

42 

Value added by source (domestic)VA that depends on domestic intermediate inputs, % [source: OECD (TiVA), 2018]65.5862.6%Value added by source (EU)VA imported from the rest of the EU, % [source: OECD (TiVA), 2018]17.9719.7%Value added by source (extra-EU)% VA imported from the rest of the world, % [source: OECD (TiVA), 2018]16.517.6%Cost competitivenessProducer energy price (industry)Index (2015=100) [source: Eurostat, sts_inppd_a]130.1111.6116.7112.110523.9%127.3Material Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]17912121242%26%Labour Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]3635475038-5%14%Sectoral producer pricesAverage (across sectors), 2021 compared to 2020 and 2019, index [source:Eurostat]5.3%5%Concentration in selected raw materialsImport concentration a basket of critical raw materials, index [source: COMEXT]0.190.180.180.20.2-5%17%Installed renewables electricity capacity Share of renewable electricity to total capacity, % [source:Eurostat, nrg_inf_epc]20.521.220.720.31%47.8%Net Private investmentsChange in private capital stock, net of depreciation, % GDP [source: Ameco]2.95.14.54.6-37%3%Net Public investmentsChange in public capital stock, net of depreciation, % GDP [source: Ameco]2.11.92.41.540%0%Single Market integrationIntra-EU tradeRatio of Intra-EU trade to Extra-EU trade, index [source: Ameco]2.622.412.362.432.486%2.00Professional services restrictivenessRegulatory restrictiveness indicatorRestrictiveness of access to and exercise of regulated professions (professions with above median restrictiveness, out of the 7 professions analysed in SWD (2021)185 [source: SWD (2021)185; SWD(2016)436 final])3   30.0%3.4%Professional qualifications recognitionRecognition decisions w/o compensationProfessionals qualified in another EU MS applying to host MS, % over total decisions taken by host MS [source: Regulated professions database]45.0%Transposition - overall5 sub-indicators, sum of scores [source: Single Market Scoreboard]Below averageOn averageOn averageBelow averageInfringements - overall4 sub-indicators, sum of scores [source: Single Market Scoreboard]Below averageBelow averageBelow averageBelow averageInvestment protectionConfidence in investment protectionCompanies confident that their investment is protected by the law and courts of MS if something goes wrong, % of all firms surveyed [source: Flash Eurobarometer 504]2556.0%BankruptciesIndex (2015=100) [source: Eurostat, sts_rb_a]71.778.579.969.72.90%70.1HEADLINE INDICATORSEconomic structureRESILIENCEShortages/supply chain disruptionsStrategic dependenciesBusiness demographyBUSINESS ENVIRONMENT - SMEsInvestment dynamicsSINGLE MARKETCompliance - cooperation EC and MS65 
 
 
  
 
Table (continued) 

Source:  See above in the table the respective source for each indicator in the column “description” 

43 

Business registrationsIndex (2015=100) [source: Eurostat, sts_rb_a]92.1105.1108.2101.2-9.0%105.6Late paymentsShare of SMEs experiencing late payments in past 6 months, % [source: SAFE]65.566.371.8n.a.n.a.-8.90%45%EIF Access to finance index - LoanComposite: SME external financing over last 6 months, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.720.640.810.694.20%0.56 (2020)EIF Access to finance index - EquityComposite: VC/GDP, IPO/GDP, SMEs using equity, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.210.10.070.23-9.00%0.18 (2020)% of rejected or refused loansSMEs whose bank loans’ applications were refused or rejected, % [source: SAFE]13.924.916.77.57.489.00%12.4%SME contractorsContractors which are SMEs, % of total [source: Single Market Scoreboard]596162573.5%63%SME bidsBids from SMEs, % of total [source: Single Market Scoreboard]64676867-4.5%70.8%(*) latest availableBusiness demographyAccess to financePublic procurement  
 
 
 
 
 
  
 
ANNEX 11: PUBLIC ADMINISTRATION 
ANNEX 11: PUBLIC ADMINISTRATION 

capacity 

administrative 

Good 
enables 
economic  prosperity,  social  progress,  and 
fairness. Public administrations at all government 
levels deliver crisis response, ensure the provision 
of  public  services,  and  contribute  to  building  the 
resilience  for  the  sustainable  development  of  the 
EU economy.  

Overall,  public  administration  in  Poland  is 
among  the  least  effective  in  the  EU27 (36). 
The  quality  of  law  making  is  affected  by  limited 
public  consultations  and  the  use  of  fast-track 
procedures.  While  consultation  mechanisms  are 
regulated,  they  are  not  mandatory  for  legislative 
proposals  submitted  by  Members  of  Parliament. 
Expedited  law-making  procedures  often  result  in 
laws  frequently 
low 
requiring  amendments  soon  after  adoption.  Some 
77%  of  businesses  found  that  fast-changing 
legislation and policies were a problem when doing 
business domestically (37). 

legislative  quality,  with 

Poland  has  made  some  progress  in  the 
delivery of digital services. The numbers of e-
government  users  has  increased  (from  49  %  in 
2020 to 55% in 2021) partly due to a significant 
expansion  of  document  e-submission  options 
because  of  COVID-19  restrictions.  However,  the 
proportion  remains  clearly  below  the  EU  average, 
as  is  the  overall  performance  on  e-government 
benchmark indicators (see Graph 1). 

its  efficiency  and 

justice  system  faces  challenges  as 
The 
regards 
independence. 
Unlike for administrative cases, the length of civil 
and  commercial  litigious  cases  was  above  the  EU 
average  in  2020  and  increased  compared  with 
2019 
instance 
in  2020 
compared  with  270 days in  2019).  The  quality  of 
the justice system is overall good: digital tools are 
widely  used  in  courts.  However,  concerns  on 
judicial independence remain (38).  

(317  days 

in  first 

Limited  participation  of  civil  servants  in 
adult 
learning  could  undermine  Poland’s 
administrative  capacity.  While  gender  parity  in 
senior civil service management positions is above 

(36)  Worldwide Governance Indicators, 2020.  

(37)  European Commission, Flash Eurobarometer 482, 2019 

(38)  For more detailed analysis of the performance of the justice 
system in Poland, see the 2022 EU Justice Scoreboard 
(forthcoming) and the country chapter for Poland in the 
Commission’s 2022 Rule of Law Report (forthcoming).  

44 

the EU average, it decreased significantly in 2019. 
The  proportion  of  public  sector  workers  between 
55  and  74  years  increased  only  slightly  and 
remains below EU average.  

Graph A11.1: E-government benchmark scores (lhs) 
and e-government users (rhs) 

Source: Eurostat (ICT use survey), E-government benchmark 
report 

Graph A11.2: Scope Index of Independent Fiscal 
Institutions 

Source: EC (Fiscal Governance Database) 

Poland´s  overall  performance  on  public 
procurement  is below the  EU  average.  This is 
primarily  due  to  the  relatively  high  numbers  of 
contracts  awarded  where  there  was  just  a  single 
bidder  and  a  relatively  low  use  of  centralised 
procurement. In addition, the scope of activities of 
its independent fiscal institution is much narrower 
than  that  of  the  average  European  country  (see 
Graph  2).  Most  notably,  activities  could  still  be 
expanded upon in the areas of monitoring of fiscal 
rules and budgetary forecasting. 

01020304050607080PLEU27 averagePLEU27 averageUser centricityTo obtain informationTransparencyTo download official formsKey EnablersTo submit completed formsCross-border servicesE-governmentbenchnark scoreE-government users0102030405060PLEU27 averageNormative assessmentsPromotion of fiscal transparencySustainability assessmentBudgetary forecasting and costingMacroeconomic forecastingCompliance with fiscal rules 
 
                                                 
  
 
  
 
Table A11.1: Public administration indicators – Poland 

This table shows a selection of indicators measuring country performance in policies that improve administrative capacity. The 
indicators fall into five main categories: i) e-government; ii) accountability; iii) civil service; iv) fiscal framework and v) evidence-
based policy making. In dark grey are indicators below or at 20th percentile, meaning that performance is at the bottom of the 
distribution. In lighter grey are the indicators below the average but above the 20th percentile. 
(1) High values stand for good performance barring indicators #7 and #8. 
(2) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as the 
existence of key enablers for the provision of those services. 
(3) Break in the series in 2021.  Also, for indicator #6, break in the series in 2018.  
(4) Defined as the absolute value of the difference between the share of men and women in senior civil service positions. 
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Fiscal Governance 
Database (#4 4, 9, 10); Labour Force Survey, Eurostat (# 5, 6, 8), European Institute for Gender Equality (# 7), Single Market 
Scoreboard public procurement composite indicator (# 11); OECD Indicators of Regulatory Policy and Governance (# 12).  

45 

PL20172018201920202021EU27140.045.049.049.055.070.72nanana58.0na71.43nana77.790.194.581.1417.517.517.517.5na56.8567.067.667.969.4na54.468.2na9.07.5na14.973.59.217.517.517.534.8816.515.715.917.3na21.290.480.480.380.38na0.72101.31.31.31.3na1.5113.30.70.71.0na-0.7121.72nana1.76na1.7Index on the degree of stakeholder engagement in the development of new regulations and in ex ante and ex-post evaluation of primary and secondary lawsGender parity in senior civil service positionsShare of public sector workers between 55 and 74 years (%)Public Financial Management Medium term budgetary framework indexStrength of fiscal rules indexPublic procurement composite indicatorIndicator (*)E-government Share of individuals who used internet within the last year to interact with public authorities (%)E-government benchmark´s overall score (**) Open government and independent fiscal institutionsOpen data and portal maturity indexEvidence-based policy makingScope Index of Fiscal InstitutionsEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with tertiary education (levels 5-8, %)Participation rate of public administration employees in adult learning (%) 
 
   
 
FAIRNESS 
FAIRNESS 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The European Pillar of Social Rights provides 
for  upward  convergence 
the  compass 
towards better working and living conditions 
in  the  EU.  The  implementation  of  its  twenty 
principles on equal opportunities and access to the 
labour  market,  fair  working  conditions,  social 
protection  and  inclusion,  supported  by  the  2030 
EU  headline  targets  on  employment,  skills  and 
poverty  reduction,  will  strengthen  the  EU’s  drive 
towards  a  digital,  green  and  fair  transition.  This 
annex provides an overview of Poland’s progress in 
achieving  the  goals  under  the  European  Pillar  of 
Social Rights. 

Table A12.1: Social Scoreboard for Poland 

Source: European Commission 

participation 

While  the  labour  market  is  recovering,  there 
remain  challenges  related  to  the  labour 
market 
and 
vulnerable  groups.  The  Polish  Labour  market 
bounced  back  quickly  after  the  pandemic-related 
shock.  By  the  fourth  quarter  of  2020,  the 
employment  rate  surpassed 
its  pre-COVID-19 
crisis  peak  reaching  75.4%.  However,  the  gender 

of  women 

in 

to 

related 

to  10.8  pps 

employment gap has continued to increase for the 
last  5  years  (reaching  14.00  pps  in  2021,  as 
the  EU).  Care 
compared 
responsibilities  for  children,  but  also  for  family 
members with disabilities, are a barrier to female 
lowest 
employment.  Poland  has  one  of  the 
childcare enrolment rates in the EU, with 11.2% of 
children under the age of 3 in formal childcare (EU: 
32.3%  in  2020),  decreasing  from  11.6% in  2017. 
The  childcare  system  lacks  a  quality  framework 
ensuring  quality  educational  guidelines.  There  are 
challenges  also 
labour  market 
segmentation.  More  than  half  of  young  people 
work  under  temporary  contracts,  as  do  40.6%  of 
third-country  nationals  (2020).  For  vulnerable 
groups,  labour  market  outcomes  are  weak  and 
worsening.  The  employment  rate  of  persons  with 
disabilities  in  2020  was  46.8%,  compared  to 
78.1% 
(a  disability 
persons  without 
employment  gap  of  around  31.3  pps,  higher  than 
the  EU  average).  The  employment  rates  of  older 
workers,  especially  women,  and  of  low-skilled 
people lag behind the respective EU averages. The 
European  Social  Fund  Plus  (ESF+)  will  support 
measures  to  improve  access  to  employment,  in 
particular  for  youth,  the  long-term  unemployed 
and  disadvantaged  groups,  childcare,  as  well  as 
flexible  upskilling  and  reskilling  opportunities. 
Social  dialogue  remains  uneven.  At  13%,  the 
coverage  of  collective  bargaining  is  among  the 
lowest  in  the  EU (39).  Tackling  these  challenges  is 
key for Poland to contribute to reaching the 2030 
EU headline target on employment.  

for 

Low  level  of  individuals’  digital  skills,  low 
adult  learning  participation  rates  as  well  as 
to  be 
skills  shortages  are  challenges 
addressed,  also  in  light  of  the  green  and 
digital  transitions.  Only  43%  of individuals  had 
at  least  basic  digital  skills  in  2021,  compared  to 
56% in the EU. Poland still lacks a national digital 
competences strategy as well as a comprehensive 
digital 
some 
fluctuations,  adult  participation  in  learning  fell  in 

schools.  After 

strategy 

for 

(39)  OECD and AIAS (2021), Institutional Characteristics of Trade 
Unions, Wage Setting, State Intervention and Social Pacts, 
OECD Publishing, Paris, OECD/AIAS ICTWSS database - OECD. 

46 

5.943.013.414.04.175.43.40.9145.317.016.136.831.34.911.21.9Critical situationTo watchWeak but improvingGood but to monitorOn averageEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24) (2021)Individuals' level of digital skills (% of population 16-74) (2021)Youth NEET(% of total population aged 15-29) (2021)Gender employment gap (percentage points) (2021)Income quintile ratio (S80/S20) (2020)Update of 29 April 2022. Members States are classified on the Social Scoreboard according to a statistical methodology agreed with the EMCO and SPC Committees. It looks jointly at levels and changes of the indicators in comparison with the respective EU averages and classifies Member States in seven categories. For methodological details, please consult the Joint Employment Report 2022. Due to changes in the definition of the individuals' level of digital skills in 2021, exceptionally only levels are used in the assessment of this indicator; NEET: neither in employment nor in education and training; GDHI: gross disposable household income.Dynamic labour markets and fair working conditionsEmployment rate(% population aged 20-64) (2021)Unemployment rate(% population aged 15-74) (2021)Long term unemployment(% population aged 15-74) (2021)GDHI per capita growth (2008=100) (2020)Housing cost overburden (% of population) (2020)Children aged less than 3 years in formal childcare (% of under 3-years-olds) (2020)Self-reported unmet need for medical care (% of population 16+) (2020)Better than averageSocial protection and inclusionAt risk of poverty or social exclusion (in %) (2020)At risk of poverty or social exclusion for children (in %) (2020)Impact of social transfers (other than pensions) on poverty reduction (% reduction of AROP) (2020)Disability employment gap (ratio) (2020)Best performers 
 
 
 
  
 
                                                 
 
 
2030 EU headline target on poverty reduction. The 
the  modernisation  and 
ESF+  will  support 
promotion of access to social protection as well as 
improvement of accessibility. 

2020 to its 2016 level (of 3.7%), far below the EU 
average of 9.2% (40). 

The  share  of  early  leavers  from  education 
and training is, at 5.9% in 2021, significantly 
below  the  EU  average  of  9.7%,  but  it  is 
particularly  high  among  persons  with 
disabilities.  Poland 
skills 
is 
shortages.  On  average,  81%  of  employers  had 
in  2021 (41); 
difficulties  filling  open  positions 
teacher shortages are particularly pronounced.  

experiencing 

recent 

improvements,  7.9%  of 

The  share  of  people  at  risk  of  poverty  or 
social  exclusion  has  decreased,  but  some 
challenges  remain.  The  share  of  the  population 
at  risk  of  poverty  or  social  exclusion  has  been 
steadily  decreasing  and  remains  amongst  the 
lowest in the EU (17% compared with 22% in the 
EU  in  2020).  However,  in-work  poverty  remains 
high  and  above the  EU  average.  Older people  are 
at  a  higher  risk  of  poverty,  especially  women. 
Moreover,  fast  population  aging,  combined  with 
the low statutory and effective retirement age, will 
likely  decrease  pension  benefits,  raising  concerns 
on  pension  adequacy,  especially  for  women. 
Despite 
the 
population  still  faces  severe  housing  deprivation. 
Social  security  schemes  are  improving,  in  spite  of 
persisting  gaps.  Other  categories  of  workers  (for 
example 
trainees,  contracts  of  mandate  or 
nannies)  still  lack  access  to  branches  of  social 
protection.  Only  26%  of  short-term  unemployed 
people  received  benefits  in  2020  (vs  56%  in  the 
EU). The share of population aged 65+ with long-
term  care  (LTC)  needs  exceeds  the  EU  average 
(35.9% vs 26.6% in the EU  in 2019), while public 
spending  on  LTC  is  well  below  the  EU  average 
(0.8% vs 1.7% in the EU in 2019). Only 18.8% of 
the population aged 65+ with LTC needs use home 
care,  compared  to  28.6%  in  the  EU  in  2019.  A 
focus on increasing psychiatric and long-term care 
services, including their deinstitutionalisation, may 
contribute  to  addressing  these  issues.  Dedicated 
actions  to  attract  and  retain  staff  may  also  be 
warranted in view of the understaffing of both the 
health and long-term care sectors. Overall, there is 
scope for reinforced policy action in these domains 
in  order  for  Poland  to  contribute  to  reaching  the 

(40)  The indicator 'adult participation in learning' (previously 

named 'lifelong learning') refers to persons aged 25 to 64 
who stated that they received education or training in the 
four weeks preceding the survey.  

(41)  ManpowerGroup Employment Outlook Survey Q3 2021 

Poland Results  

47 

 
                                                 
 
ANNEX 13: EDUCATION AND SKILLS 
ANNEX 13: EDUCATION AND SKILLS 

This  Annex  outlines  the  main  challenges  for 
Poland’s  education  and  training  system  in 
light of the EU-level targets of the European 
Education  Area  strategic  framework  and 
other  contextual  indicators,  based  on  the 
analysis  from  the  2021  Education  and 
Training  Monitor.  Poland’s  education  system 
faces  challenges  related  to  its  reorganisation  and 
the  pandemic.  Gaps  in  the  accessibility  of  early 
childhood  education  and  care  (ECEC)  persist. 
Decreased 
in  education  affects 
teachers’ salaries and shortages are pronounced. 

investment 

In  2019, 

in  provision  persist. 

Participation  in  early  childhood  education 
and  care  (ECEC)  continues  to  grow,  however 
gaps 
the 
enrolment  rate  of  children  between  3  and  the 
starting age of compulsory primary education was 
below  the  EU  average.  Since  2017/2018,  children 
legally  entitled  to  pre-school 
aged  3-5  are 
education (while pre-school education is obligatory 
for  6-year-olds),  however,  the  participation  of  3-
year-olds  is  at  estimated  77.6%  and  4-year-olds 
at  estimated  89.2%.  The  regional  disparities  and 
the urban-rural gap leave some groups of children 
at educational disadvantage (see Graph 1).  

While  the  basic  skills  of  Polish  15-year-olds 
are above the EU average, the school system 
was  reorganised  leading  to  organisational 
and  financial  challenges,  further  aggravated 
by  COVID-19.  Polish  schools  continue  struggling 
with  the  implementation  of  the  reorganisation, 
which  was  launched  in  2016 (42).  The  new  core 
curriculum  requirements  and 
long  periods  of 
distance  learning  due  to  COVID-19  posed  further 
challenges.  First  evidence  on  the  situation  in 
Warsaw shows that there is a decline in students’ 
achievements (43).  Additional  overcrowding  of 
secondary  schools  and  classes  expected  in  2022, 
due  to  an  increased  cohort  completing  primary 
schools,  may  further  affect  the  learning  and 

(42)  The reform of lower and upper secondary schools introduced 
by the Law on School Education of December 2016 for 
implementation between 1 September 2017 and the school 
year 2022/2023. The reform increased the starting age of 
compulsory primary education to 7, advanced the tracking of 
students between general and vocational paths by one year, 
phased out lower-secondary schools, and introduced a new 
core curriculum. 

(43)  Achievement of secondary school students after the 

pandemic lockdown and structural reforms of education 
system, Policy note 1/2022, Evidence Institute, 2022 
(https://www.evidin.pl/en/publications/educational-
publications/)  

working  conditions.  The  comprehensive  impact  of 
the introduced reform measures and COVID-19 on 
students’  achievements  is  still  to  be  assessed. 
Significant gaps in digital education, concerning in 
particular  quality  digital  teaching  methodologies 
and online materials, as well as ICT equipment and 
connectivity  require  a  comprehensive  strategic 
approach.  To  foster  inclusive  education,  evidence 
shows (44)  that  there  is  still  a  need  to  ensure 
sufficient  support  specialists,  new  co-operation 
models and teacher education focussing on quality 
and equity improvements. 

Graph A13.1: Participation in early childhood 
education by age, 2015-2019 (%) 

Source: UOE, educ_uoe_enra18, educ_uoe_enra19, 
educ_uoe_enra20 

(44)  Podgórska-Jachnik, D. (2021) Raport merytoryczny. Edukacja 
włączająca w Polsce - bilans otwarcia 2020. Warszawa: 
Ośrodek Rozwoju Edukacji. 

48 

55606570758085909510020152016201720182019% 3-year-olds (EU)3-year-olds (PL) 4-year-olds (EU) 4-year-olds (PL)5+  (EU)5+ (PL) 
 
                                                 
   
 
                                                 
 
Table A13.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: The 2018 EU average on PISA reading performance does not include ES; b = break in time series, e = estimated, u = low 
reliability: = not available. Data is not yet available for the remaining EU-level targets under the European Education Area 
strategic framework, covering underachievement in digital skills, exposure of vocational educational training graduates to work 
based learning and participation of adults in learning. 
Source: Eurostat (UOE, LFS); OECD (PISA) 

Tertiary  educational  attainment  fell  slightly 
below  the  EU  average,  and  the  gender  gap 
continues to be wide. The gender gap at 19 pps 
in  favour  of  women  has  remained  wide,  being 
close  to  double  the  EU  average  (11.1  pps).  In 
2020,  the  overall  proportion  of  graduates  in 
science, technology, engineering and mathematics 
(STEM) fell to 20.8%, below the EU level of 26%.  

education 

institutions 

Higher 
are 
implementing the reform aimed at improving 
quality; however, recent decisions undermine 
its  objective. 
In  2022,  higher  education 
institutions will undergo a new evaluation of their 
scientific  achievements  in  line  with  the  Law  2.0 
reform.  However,  ad-hoc  changes,  made  without 
the  consultation  of  the  Commission  for  Scientific 
Evaluation,  increased  the  uncertainty  about  the 
process  and  there  is  lack  of  transparency  of  the 
assessment procedures. 

public 

included 

expenditure 

the  high  costs 

Investment  in  education  is  low  at  all  levels, 
affecting also teachers’ salaries. In real terms, 
during  2015-2019, 
on 
education  rose  by  9.8%,  however,  the  rise  was 
only  for  pre-primary  and  primary  education  (by 
47.6%).  This 
for 
reorganising the school  system launched in 2016. 
At  the  secondary  and  post-secondary  non-tertiary 
level, expenditure dropped by 18.5%, and in higher 
education  by  2.5%.  Local  governments  face 
challenges  in  maintaining  the  school  network  due 
to  increased  costs.  The  salaries  of  teachers  are 
comparatively  low (45),  which  aggravates  teacher 
shortages.  Recruiting  qualified  teachers  for  many  
subjects  is  difficult (46)  and  children’s  right  to 
education is at risk (47). 

(45)  OECD (2021), “Poland”, in Education at a Glance 2021: OECD 

Indicators, OECD Publishing, Paris. DOI: 
https://doi.org/10.1787/9399a67a-en  

(46)  Najwyższa Izba Kontroli (2021), Organizacja pracy 
nauczycieli w szkołach publicznych (part 1 and 2) 
(8.07.2021) 
https://www.nik.gov.pl/plik/id,24597,vp,27344.pdf  

(47)  Rzecznik Praw Obywatelskich (2021), Brakuje nauczycieli - 

prawo do nauki zagrożone. Letter to the Minister of 
Education and Science of 14.09.2021. 

49 

96%84.3%91.9%90.3%2019, e92.8%2019Reading< 15%14.4% 20.4%14.7%201822.5%2018Mathematics< 15%17.2% 22.2%14.7%201822.9%2018Science< 15%16.3% 21.1%13.8%201822.3%2018< 9 %5.3%11.0%5.9%9.7%Men7.2%12.5%7.2%11.4%Women3.2%9.4%4.4% 7.9%Cities4.5%9.6%6.0% 8.7%Rural areas6.1%12.2%5.6%10.0%Native5.3%10.0%5.9%8.5%EU-born:u20.7%:u21.4%Non EU-born:u23.4%:u21.6%45%43.2%36.5%40.6%41.2%Men34.0%31.2%31.3%35.7%Women52.8% 41.8%50.3%46.8%Cities58.2%46.2%58.8%51.4%Rural areas30.0%26.9%27.4%29.6%Native43.1%37.7%40.4%42.1%EU-born:u32.7%76.1%40.7%Non EU-born66.9%u27.0%63.5%34.7%29.0% 38.3%35.6%201938.9%201920152021IndicatorTargetPolandEU27PolandEU27Participation in early childhood education (age 3+)Low achieving 15-year-olds in:TotalBy genderBy degree of urbanisationEarly leavers from education and training (age 18-24)Share of school teachers (ISCED 1-3) who are 50 years or overBy country of birthTotalBy genderBy degree of urbanisationBy country of birthTertiary educational attainment (age 25-34) 
                                                 
 
  
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

Especially  relevant  in  light  of  the  ongoing 
COVID-19 pandemic, resilient healthcare is a 
prerequisite  for  a  sustainable  economy  and 
society.  This  Annex  provides  a  snapshot  of  the 
healthcare sector in Poland. 

Graph A14.1: Life expectancy at birth, years 

Graph A14.2: Projected increase in public 
expenditure on healthcare over 2019-2070 
(reference scenario) 

Source: European Commission/EPC (2021) 

Poland  faces  a  shortage  as  well  as  an 
uneven distribution of health workers, which 
contributes to long waiting times for publicly 
funded services. With doctors numbering 2.4 per 
1 000  population  and  the  nurses  5.1  per  1 000 
population  Poland  ranks  amongst  the  Member 
States  with  the  lowest  staffing  levels  in  the  EU. 
The  health  care  system  remains  overly  hospital-
based.  At  the  same  time,  the  hospital  system 
suffers  from  a  series  of  problems,  such  as  a 
deteriorating  financial  situation,  lack  of  quality 
assurance and mismanagement. The primary care 
is  underfunded,  understaffed  and 
system 
overstretching 
substantial 
reinforcement  in  primary  care  could  help  to  build 
resilience in the health system. 

services. 

its 

A 

Source: Eurostat database 

Life  expectancy  in  Poland  is  lower  than  the 
EU  average,  and  fell  further  in  2020  by  1.5 
years  (2nd  highest  drop  in  the  EU)  due  to 
COVID-19.  As  of  17  April  2022,  Poland  reported 
3.06  cumulative  COVID-19  deaths  per  1 000 
inhabitants and 158 confirmed cumulative COVID-
19  cases  per  1 000 inhabitants.  Both  preventable 
mortality  -  deaths  that  can  be  mainly  avoided 
through  public  health  and  primary  prevention 
interventions  -  and  treatable  mortality  were 
substantially higher than the EU average in 2019. 
Improvements in treatable mortality rates over the 
last  decade  at  least  partly  reflect  investments  in 
cardiology care. 

Health  spending  relative  to  GDP  in  Poland 
(6.5%)  was  below  the  EU  average  (9.9%)  in 
2019.  Moreover,  in  per  capita  terms,  health 
expenditure amounted to EUR 1 582 (adjusted for 
differences  in  purchasing  power),  among  the 
lowest  amounts  in  the  EU.  Public  funding  was 
71.8%  of  the  total  expenditure  in  2019  (EU 
average 
spending 
accounted  for  20.1%  of  all  health  spending,  with 
the  bulk  spent  on  outpatient  medicines.  Public 
expenditure  on  health  is  projected  to  increase  by 
2.6  percentage  points  (pp)  of  GDP  by  2070 
(0.9EU) (48),  raising  long-term  fiscal  sustainability 
concerns.  

Out-of-pocket 

79.8%). 

(48)  The 2021 Ageing Report: Economic and Budgetary 

Projections for the EU Member States (2019-2070)”, 

European Commission (ECFIN) and Ageing Working Group 
(EPC).   

50 

80.580.980.98181.380.477.57877.877.77876.6201520162017201820192020EUPoland6.64.90.92.602468EUPoland% of GDP20192070increase 
 
   
                                                 
  
 
 
 
 
 
 
                                                                              
 
Table A14.1: List of key indicators, health 

Doctors' density data refer to practising doctors except for FI, EL, PT (licensed to practice) and SK (professionally active). Nurses' 
density data refer to practising nurses (imputation from year 2014 for FI) except for IE, FR, PT, SK (professionally active) and EL 
(nurses working in hospitals only). More information: https://ec.europa.eu/health/state-health-eu/country-health-profiles_en 
Source: Eurostat Database, except: *Eurostat Database and OECD, **ECDC. 

51 

20162017201820192020EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)129.8132.0133.1133.792.1 (2017)Cancer mortality per 100 000 population297.4290.5291.2283.4252.5 (2017)Current expenditure on health, % GDP 6.56.66.36.59.9 (2019)Public share of health expenditure, % of current health expenditure69.969.371.571.879.5 (2018)Spending on prevention, % of current health expenditure 3.12.42.32.12.8 (2018)Acute care beds per 100 000 population491.8485.1473.5435.4387.4 (2019)Doctors per 1 000 population *2.42.42.40.03.8 (2018)Nurses per 1 000 population *5.25.10.00.08.2 (2018)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day **20.723.823.022.217.214.5 (2020) 
 
 
 
 
   
 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

is  an 

The  regional  dimension 
important 
factor  when  assessing  economic  and  social 
developments  in  a  Member  State.  Taking  into 
account  this  dimension  enables  a  well-calibrated 
and targeted policy response that fosters cohesion 
and  ensures  sustainable  and  resilient  economic 
development across all regions. 

sector.  Currently,  around  half  of  all  miners  in  the 
EU are employed in Poland. Close to 25 000 direct 
and indirect jobs are estimated to be lost by 2030 
as  result  of  the  phasing  out  of  the  mining  and 
related  activities in the NUTS3 areas proposed by 
the Commission for the JTF support, in addition to 
over 300 000 jobs lost as result of over 45 mines 
closed since 1989.  

Graph A15.1: Territories most affected by the 
climate transition in Poland 

Source: European Commission 

The  digital  performance  of  Poland 
is 
improving,  but  remains  one  of  the  lowest  in 
the  EU.  In  2020,  42%  of  the  population  used 
internet  for  interaction  with  public  authorities 
against  56%  on  average  in  the  EU.  Dispersion  of 
e-services  at 
together  with 
structure 
sometimes  a 
contribute  to  the  low  take-up,  which  ranges  from 
29%  in  Opolskie  to  52%  in  Mazowieckie.  At  the 
same  time,  in  2020  the  usage  of  e-services 
speeded up due to the COVID-19 lockdown, but it 
is not yet visible in data. The main authentication 
service  ‘Trusted  Profile’  doubled  the  number  of 
active profiles to 4 million in comparison to 2019. 

regional 
complex  navigation 

level 

All  Polish  regions  with  the  exception  of  the 
capital  region  Warszawski  Stołeczny  remain 
below  the  EU  average  in  terms  of  GDP  per 
capita  (PPS),  despite  continued  convergence  to 
the  EU  average.  Internal  disparities  between  the 
capital region and the least developed regions are 
lack  of  skilled 
increasing,  driven  mainly  by 
workforce  and 
in  R&D  and 
labour 
entrepreneurship,  contributing 
productivity  gap,  as  well  as  lower  accessibility  to 
public  services  in  particular  in  the  rural  areas  in 
the least developed regions. 

investment 

low 

the 

to 

Regional  disparities  in  GDP  per  head  have 
continuously  increased  in  Poland  during  the 
last decade, with the GDP per head in the capital 
city  region  of  160%  of  the  EU  average  while  in 
other regions with the GDP per head ranging from 
80%  (Dolnoslaskie  and  Wielkopolskie)  to  50-52% 
in  Lubelskie,  Warmińsko-Mazurskie,  Podkarpackie, 
Świętokrzyskie and Podlaskie.  

The  labour  productivity  varies  within  the 
country.  In  the  capital  city  region,  productivity 
was at 145% of the EU average while in the least 
regions  of  Lubelskie,  Podlaskie, 
developed 
Świętokrzyskie, 
and 
Warmińsko-Mazurskie 
Podkarpackie at 53-58%. 

In  Poland,  coal 
is  the  main  source  of 
electricity  production  and  heating  thus 
contributing  to  the  high  greenhouse  gas 
emissions.  Transport  also  contributes  heavily  to 
the  greenhouse  gases  emissions  which,  without 
additional  measures,  are  projected  to  increase  till 
2030  due  to  a  poor  accessibility  of  public 
transport outside big cities (49) and an ageing fleet 
of  cars.  Decarbonisation  of 
the  coal-based 
economy is a major challenge, taking into account 
the social dimension of the transition in the mining 

(49)  Analysis of the functional and spatial relations between 
urban centres and their surroundings, Polish Academy of 
Sciences, p. 8 and 84, ref: 
https://psme.pomorskie.eu/documents/512265/2677695/Rap
ort_og%C3%B3lnopolski_18102019_na+www.pdf/9fcdca0e
-1f13-4705-a32e-1120b81cc737 ; 

52 

 
 
                                                 
 
 
 
 
 
Graph A15.2: Innovation performance in Poland 

Warminsko-Mazurskie 

employment  rate  ranged  from  82% in  the  capital 
region  to  70%  in  the  least  developed  regions  of 
Podkarpackie, 
and 
Lubelskie.  The  gender  employment  gap  is  above 
EU  average  in  all  regions  except  for  Warszawski 
stoleczny,  reaching  20.2  percentage  points  in 
Wielkopolskie. There are big regional disparities in 
youth  unemployment  (15-29)  ranging  in  2020 
between  6%  in  Pomorskie  and  Lubuskie  and  over 
17%  in  the  regions  of  Lubelskie,  Podkarpackie, 
Świętokrzyskie. 

lowest 

in  Łódzkie  and 

While  Poland  as  a  whole  has  been  severely 
affected by the COVID pandemic in terms of high 
excess  mortality,  the  regional  impact  varies  with 
the 
in 
Podkarpackie.  All  regional  labour  markets  slowed 
due  to  the  COVID  pandemic  that  restrained  the 
economic  growth 
in  2020. The  share  of  the 
population  at  risk  of  severe  material  deprivation 
continued to decrease in 2020 in most regions but 
increased in Pomorskie, Podlaskie and Opolskie. 

the  highest 

Source: European Commission 

In 

in 

and 

In  several 

Investment 
innovation 
R&D 
performance  is  much  lower  in  the  less 
developed  regions,  except  Małopolska  and 
Warszawskie  Stołeczne. 
the  Warszawskie 
Stołeczne, R&D expenditure was at 2.44% of GDP 
in  2018,  and  around  50%  of  employment  was  in 
knowledge-intensive  services. 
less 
developed regions, R&D  expenditure is lower than 
0.5% of GDP, and less than 30% of workers were 
employed  in  knowledge-intensive  services.  The 
Regional  Competitiveness Index  - which measures 
the major factors of competitiveness in EU regions 
-varies from over 68.3 in the capital region to less 
than  35  in  several  less  developed  regions.  The 
share  of  population  with  high  educational 
attainment  (aged  30-34)  is  also  much  higher  in 
the capital region (over 70%) than in all regions in 
Poland (between 35%-50%) and compared to the 
EU  average.  Outside  the  capital  region,  emerging 
growth  poles  are  located  around  regional  capitals 
of  Wielkopolska,  Lower  Silesia,  Małopolska  and 
Pomorskie in less developed regions.  

regions 

between 

Disparities 
remain 
significant.  Some  regions  suffer  from  a  severe 
loss in their population. Between 2000 and 2019, 
Świętokrzyskie,  Łódzkie  and  Opolskie  lost  more 
than  3.5%  of  their  population.  The  population 
increased  in  moderately  developed  regions  like 
Pomorskie  and  Małopolskie  (+2  to  3%)  and  the 
capital  region  (+7%).  Some  disparities  in  labour 
in  2020.  The 
market  conditions 

remained 

53 

 
 
Table A15.1: Poland, selected indicators at regional level 

Source: Eurostat, EDGAR database 

54 

NUTS 2 RegionGDP per head (PPS)Productivity (GVA (PPS) per person employed)Employment ratePopulation with high educational attainmentR&D expenditureEmployment in high-technology sectorsEmployment in knowledge-intensive servicesRegional Competitiveness IndexCO2 emissions from fossil fuels  per headInnovation performanceEU27=100, 2019EU27=100, 2018% of pop. aged 20-64, 2020% of population aged 30-34, 2017-2019% of GDP, 2018% of total employment, 2020% of total employment, 2020Range 0-100, 2019tCO2 equivalent, 2018RIS regional performance groupEuropean Union10010072.339.42.194.540.0157.37.2Polska737573.646.01.213.432.1942.8Małopolskie677173.649.72.144.232.9247.48.7Moderate innovator -Śląskie748170.244.80.723.131.1649.012.7Emerging innovatorWielkopolskie797675.441.80.752.025.6740.76.9Emerging innovator +Zachodniopomorskie606671.340.30.551.733.1935.88.3Emerging innovatorLubuskie596672.536.40.482.530.7234.25.9Emerging innovatorDolnośląskie808475.148.51.094.934.8943.87.8Emerging innovator +Opolskie576573.139.10.631.728.7439.020.4Emerging innovatorKujawsko-pomorskie586371.336.80.652.627.9534.67.4Emerging innovatorWarmińsko-mazurskie505869.635.70.561.430.6928.65.0Emerging innovatorPomorskie717375.748.01.403.934.7143.96.4Emerging innovator +Łódzkie696575.944.00.954.028.2441.213.8Emerging innovator +Świętokrzyskie525772.245.30.571.028.0434.410.4Emerging innovatorLubelskie505370.542.21.022.133.3734.76.8Emerging innovator +Podkarpackie515870.042.91.112.228.8235.06.2Emerging innovator +Podlaskie525673.446.50.721.428.7134.55.8Emerging innovatorWarszawski stołeczny16014581.771.62.448.650.4968.34.9Moderate innovatorMazowiecki regionalny636072.940.20.451.725.9742.812.6Emerging innovatorOpolskie, Warmińsko-mazurskie, Świętokrzyskie, Podlaskie - Employment in high-technology sectors reference year: 2019 
 
   
 
MACROECONOMIC STABILITY 
MACROECONOMIC STABILITY 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 

This  Annex  provides  an  overview  of  key 
developments  in  Poland’s  financial  sector. 
Poland has a modern and well-diversified banking 
system. The domestic banking sector’s total assets 
are  equivalent  to  the  country’s  economic  output. 
The  top  five  lenders  own  54.3%  of  the  total 
assets. The sector is well diversified with both big 
commercial  banks  present  in  the  market  along 
with  a  network  of  smaller  cooperative  lenders. 
Most  banks  (57.9%)  are  controlled  by  Polish 
capital,  in  stark  contrast  to  the  situation  from  a 
decade  ago  when  the  sector  was  dominated  by 
intermediation  ratio 
foreign  subsidiaries.  The 
(loan-to-deposit)  has  been  decreasing  for  a 
number  of  years,  down  to  74.6%  in  2021.  Polish 
firms  rely  mostly  on  bank  credit  to  finance  their 
investments  –  the  market  funding  ratio  remained 
mostly  stable  at  around  48%  since  2017.  Banks 
managed  the  pandemic  driven  recession  well, 
supporting  the  private  sector  through  credit 
payment  moratoria  while  continuing  to  provide 
credit to the economy.  

and  asset  quality  has  improved  over  2021  –  the 
non-performing loans ratio dropped to 5.4% in Q3 
2021.  Back  in  2020,  banks  heavily  provisioned 
their  loan  books  against  expected  credit  losses. 
Some of these provisions have been subsequently 
released  in  2021.  Credit  growth  in  2021  (5.4% 
year  on  year  growth)  has  almost  reached  pre-
is  rapidly 
levels  as  the  economy 
pandemic 
recovering  from  the  pandemic  shock.  The  sector 
has been struggling with relatively low profitability 
(5.9% in 2021) for a number of years on the back 
of  low  interest  rates  and  uncertainties  related  to 
legacy  FX  mortgages.  The  legal  risk  associated 
with  FX  mortgages  remains  the  main  risk  to 
domestic financial stability,  and at the same time 
one  of  the  key  sources  of  low  profitability  given 
the  sizeable  provisions  for  legal  risks  booked  by 
lenders  over  2020-2021.  Profitability  is  expected 
to  improve  as  interest  rates  in  Polish  zloty 
continue to rise but credit risk may also increase. 

have 

Banks 
but 
profitability remains weak. Domestic banks are 
well  capitalised (capital  adequacy  ratio  of  18.6%) 

fundamentals 

solid 

Table A16.1: Financial soundness indicators 

Source: ECB, Eurostat, Refinitiv. 

55 

20172018201920202021Total assets of the banking sector (% of GDP)95.192.792.1102.6103.3Share (total assets) of the five largest bank (%)47.549.549.854.3-Share (total assets) of domestic credit institutions (%)154.853.354.056.657.9Financial soundness indicators:1- non-performing loans (% of total loans)6.66.26.16.05.4- capital adequacy ratio (%)18.017.917.819.618.6- return on equity (%)6.97.06.93.15.9NFC credit growth (year-on-year % change)8.66.62.9-6.44.5HH credit growth (year-on-year % change)6.45.66.51.55.0Cost-to-income ratio (%)157.256.756.054.253.4Loan-to-deposit ratio (%)193.793.291.980.374.6Central bank liquidity as % of liabilities0.00.40.00.0-Private sector debt (% of GDP)76.976.873.975.8-Gross external debt (% of GDP)1Gross external debt (% of GDP)   - public126.122.819.218.617.0Gross external debt (% of GDP)    - private129.728.828.828.428.8Long-term interest rate spread versus Bund (basis points)310.3280.2260.0200.8232.0Market funding ratio (%)48.846.645.448.5-Green bond issuance (bn EUR)-1.02.2-1.01Last data: Q3 2021. 
 
 
 
 
 
 
 
  
 
tax 

the 

schedule  more  progressive, 
reform 
adopted  in  the  Autumn  of  2021  is  expected  to 
increase  the  tax  burden  on  higher  earners,  while 
possibly  reducing  it  for  low  earners.  In  2020,  the 
ability  of  the  Polish  tax  and  benefit  system  to 
reduce  income  inequality  (measured  by  its  ability 
to  reduce  the  GINI  coefficient)  was  comparatively 
low. 

is 

advanced 

relatively 

in 
Poland 
implementing  the  digital  transformation  of 
the tax administration, which can help reduce 
tax  arrears.  Today,  outstanding  tax  arrears 
account  for  around  one  third  of  total  tax  revenue 
(corresponding to the EU average). The process of 
digitalising the Polish tax administration started in 
implemented  SAF-T,  the 
2016  when  Poland 
international  standard for the electronic exchange 
of  accounting  data.  The  corresponding  reporting 
obligation  started  with  large  companies  but  was 
extended  successively  to  small  firms.  2019  saw 
the  mandatory  introduction  of  split  payments  (by 
which vendors pay to suppliers’ account and a VAT 
account  in  parallel),  and  a  modernisation  of  VAT 
reporting.  In  2021,  a  system  of  structured  e-
invoices  was  introduced  that  allows  issuing  and 
receiving  electronic  structured  invoices  via  the 
National  Invoice  System.  The  obligation  to  issue 
invoices  through  that  system  only  is  foreseen  for 
2023. It will allow for the preparation of pre-filled 
VAT  tax  returns  (this  needs  approval  by  the 
European Commission).   

ANNEX 17: TAXATION 
ANNEX 17: TAXATION 

This  Annex  provides  an 
indicator-based 
overview  of  Poland’s  tax  system.  It  includes 
information  on  the  tax  structure,  i.e.  the  types  of 
tax that Poland derives most revenue from, the tax 
burden  for  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
tax  collection  and 
provides 
compliance  and  on  the  risks  of  aggressive  tax 
planning activity. 

information  on 

from 

labour 

revenue 

taxation 

Poland’s  tax  system  relies  relatively  heavily 
on  consumption  and  capital  taxation  while 
the 
is 
comparatively  low.  The  total  tax  revenue  in 
Poland  (35.7%  of  GDP  in  2020)  is  below  the  EU 
average 
labour 
taxation explains the difference (14.4% of GDP in 
Poland as compared to 21.5% in the EU average), 
while  tax  revenue  from  other  types  of  taxes  is 
close  to  the  EU  average  or  even  above,  as  in  the 
case of consumption and capital taxes.  

revenue  from 

(40.2%).  Tax 

Poland’s  tax  burden  on  labour  is  relatively 
low,  especially  at  high-income  levels.  The 
labour  tax  wedge  in  Poland  was  close  to  the  EU 
average  at  low  earnings  (i.e.  for  single  taxpayers 
earning 50% or 67% of the average wage), but it 
was  significantly  below  the  EU  average  at  higher 
earnings  (e.g.  at  100%  and  167%  of  the  average 
wage),  as  well  as  for  second  earners  (see  Graph 
18.1).  By  reducing  the  deductibility  of  health 
contributions and making the personal income tax 

Table A17.1: Indicators on taxation 

(1) Forward-looking Effective Tax Rate (OECD) 
(*) EU-27 simple averages there is no aggregated EU-27 value 
Source: European Commission and OECD 

56 

2010201820192020202120102018201920202021Total taxes (including compulsory actual social contributions) (% of GDP)31.335.135.135.737.940.139.940.1Labour taxes (as % of GDP)11.814.114.214.420.020.720.721.5Consumption taxes (as % of GDP)12.412.512.312.410.811.111.110.8Capital taxes (as % of GDP)7.18.58.68.97.18.28.17.9Total property taxes (as % of GDP)1.41.71.71.71.92.22.22.3Recurrent taxes on immovable property (as % of GDP)1.11.11.11.11.11.21.21.2Environmental taxes as % of GDP2.72.72.52.52.42.42.42.2Tax wedge at 50% of Average Wage (Single person) (*)32.334.534.333.333.533.932.432.031.531.9Tax wedge at 100% of Average Wage (Single person) (*)34.235.835.634.834.941.040.240.139.939.7Corporate Income Tax - Effective Average Tax rates (1) (*)18.015.515.519.819.519.3Difference in GINI coefficient before and after taxes and cash social transfers (pensions excluded from social transfers)4.75.55.34.68.47.97.48.3Outstanding tax arrears: Total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)31.331.031.931.8VAT Gap (% of VTTL)11.611.311.210.5Dividends, Interests and Royalties (paid and received) as a share of GDP (%)3.22.92.610.710.5FDI flows through SPEs (Special Purpose Entities), % of total FDI flows (in and out)0.00.20.547.846.236.7PolandEU-27Tax structureProgressivity & fairnessTax administration & complianceFinancial Activity Risk 
 
 
 
 
   
 
Graph A17.1: Tax wedge indicators 

The tax wedge measures the difference between the total labour cost of employing a worker and the worker’s net earnings: sum 
of personal income taxes and employee and employer social security contributions, net of family allowances, expressed as a 
percentage of total labour costs (the sum of the gross wage and social security contributions paid by the employer).” 

(1) The second earner average tax wedge measures how much extra personal income tax (PIT) plus employee and employer social 
security contributions (SSCs) the family will have to pay as a result of the second earner entering employment, as a proportion of 
the second earner’s gross earnings plus the employer SSCs due on the second earner’s income. For a more detailed discussion see 
OECD (2016), “Taxing Wages 2016”, OECD Publishing, Paris. http://dx.doi.org/10.1787/tax_wages-2016-en  
(*) EU-27 simple average as there is no aggregated EU-27 value 
Source: European Commission 

57 

33.534.234.935.935.243.6102030405060At 50% of Average Wage (Singleperson)At 67% of Average Wage (Singleperson)At 100% of Average Wage (Singleperson)At 167% of Average Wage (Singleperson)For second earner at 67% of AverageWage (Two earner couple, 1st earner100% of AW) (1)Tax wedge 2021 (%)PLEU-27 (*) 
 
 
  
 
ANNEX 18: KEY ECONOMIC AND FINANCIAL INDICATORS 
ANNEX 18: KEY ECONOMIC AND FINANCIAL INDICATORS 

Table A18.1: Key economic and financial indicators 

(1) NIIP excluding direct investment and portfolio equity shares. 
(2) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
Source: Eurostat and ECB as of 2022-05-02, where available; European Commission for forecast figures (Spring forecast 2022) 

58 

2004-072008-122013-1820192020202120222023Real GDP (y-o-y)5.43.43.74.7-2.25.93.73.0Potential growth (y-o-y)3.84.03.24.03.63.93.63.4Private consumption (y-o-y)4.13.23.33.9-2.86.04.83.7Public consumption (y-o-y)4.01.72.86.54.93.41.31.8Gross fixed capital formation (y-o-y)12.32.53.26.1-4.93.84.13.9Exports of goods and services (y-o-y)10.05.07.75.20.011.85.53.9Imports of goods and services (y-o-y) 12.02.87.33.0-1.115.95.73.8Contribution to GDP growth:Domestic demand (y-o-y)5.72.83.04.5-1.64.73.63.1Inventories (y-o-y)0.7-0.30.3-1.0-1.12.40.0-0.2Net exports (y-o-y)-1.00.80.31.30.6-1.20.10.1Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.40.50.20.61.01.31.10.9Capital accumulation (y-o-y)1.21.81.41.41.11.11.11.2Total factor productivity (y-o-y)2.21.71.62.01.61.51.41.4Output gap-0.31.3-0.33.2-2.5-0.6-0.5-0.9Unemployment rate15.79.37.13.33.23.44.13.9GDP deflator (y-o-y)3.23.00.93.24.25.810.07.8Harmonised index of consumer prices (HICP, y-o-y)2.43.70.52.13.75.211.67.3Nominal compensation per employee (y-o-y)3.05.84.17.35.65.09.58.0Labour productivity (real, hours worked, y-o-y)2.73.33.05.1-1.40.91.61.5Unit labour costs (ULC, whole economy, y-o-y)0.42.81.42.47.90.66.05.1Real unit labour costs (y-o-y)-2.7-0.20.5-0.73.5-4.9-3.7-2.5Real effective exchange rate (ULC, y-o-y)3.0-1.50.2-1.5....Real effective exchange rate (HICP, y-o-y)3.6-1.2-0.2-1.01.1-0.4..Net savings rate of households (net saving as percentage of net disposable income)2.00.90.40.76.9...Private credit flow, consolidated (% of GDP)6.56.83.93.61.63.8..Private sector debt, consolidated (% of GDP)46.370.478.273.975.671.1..of which household debt, consolidated (% of GDP)17.333.035.634.434.632.3..of which non-financial corporate debt, consolidated (% of GDP)29.037.342.639.641.038.7..Gross non-performing debt (% of total debt instruments and total loans and advances) (2)3.95.75.14.54.0...Corporations, net lending (+) or net borrowing (-) (% of GDP)0.74.65.44.58.83.73.23.4Corporations, gross operating surplus (% of GDP)22.423.724.424.025.123.824.224.5Households, net lending (+) or net borrowing (-) (% of GDP)-1.9-2.6-2.3-1.72.81.01.71.9Deflated house price index (y-o-y).-5.51.36.17.1...Residential investment (% of GDP)3.43.32.51.91.92.0..Current account balance (% of GDP), balance of payments-4.9-5.2-1.30.52.9-0.6-2.4-2.0Trade balance (% of GDP), balance of payments-2.6-2.42.64.86.74.5..Terms of trade of goods and services (y-o-y)1.5-0.50.91.22.8-1.5-3.70.7Capital account balance (% of GDP)0.61.71.92.02.31.6..Net international investment position (% of GDP)-44.2-61.2-63.2-49.8-44.3-39.9..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (1)-10.4-24.0-23.3-12.5-6.20.4..IIP liabilities excluding non-defaultable instruments (% of GDP) (1)36.851.956.346.347.243.4..Export performance vs. advanced countries (% change over 5 years)69.036.214.622.737.6...Export market share, goods and services (y-o-y)8.80.14.93.812.91.70.8-0.4Net FDI flows (% of GDP)-3.5-1.9-1.7-2.0-2.1-3.6..General government balance (% of GDP)-3.6-5.4-2.4-0.7-6.9-1.9-4.0-4.4Structural budget balance (% of GDP)..-2.2-2.3-5.9-1.8-4.0-4.0General government gross debt (% of GDP)45.951.852.145.657.153.850.849.8forecast 
 
 
 
 
  
 
ANNEX 19: DEBT SUSTANAINABILITY ANALYSIS 
ANNEX 19: DEBT SUSTANAINABILITY ANALYSIS 

‘adverse interest-growth rate’ scenario assumes a 
in  the 
less  favourable  snowball  effect  than 
baseline.  In  the  ‘financial  stress’  scenario,  the 
country  temporarily  faces  higher  market  interest 
rates in 2022. 

Graph 2 shows the outcome of the stochastic 
projections.  These  projections  show  the  impact 
on  debt  of  2  000  different  shocks  affecting  the 
government’s 
economic 
growth,  interest  rates  and  exchange  rates.  The 
cone covers 80% of all the simulated debt paths, 
therefore excluding tail events. 

budgetary 

position, 

Table  2  shows  the  S1  and  S2  fiscal 
sustainability 
indicators  and  their  main 
drivers.  S1  measures  the  consolidation  effort 
needed to bring debt to 60% of GDP in 15 years. 
S2  measures  the  consolidation  effort  required  to 
stabilise  debt  over  an  infinite  horizon.  The  initial 
budgetary position measures the effort required to 
cover  future  interest  payments,  the  ageing  costs 
component  accounts  for  the  need  to  absorb  the 
projected 
public 
expenditure  such  as  pensions,  health  care  and 

in  ageing-related 

change 

This  annex  assesses  fiscal  sustainability 
risks  for  Poland  over  the  short,  medium  and 
long term. It follows the same multi-dimensional 
approach as the 2021 Fiscal Sustainability Report, 
updated  on  the  basis  of  the  Commission  2022 
spring forecast. 

Table  1  presents 
the  baseline  debt 
projections.  It  shows  the  projected  government 
debt  and  its  breakdown  into  the  primary  balance, 
the  snowball  effect  (the  combined  impact  of 
interest payments and nominal GDP growth on the 
debt  dynamics)  and  the  stock-flow  adjustment. 
These projections assume that no new fiscal policy 
measures  are  taken  after  2023,  and  include  the 
expected  positive  impact  of  investments  under 
Next Generation EU.   

Graph  1  shows  four  alternative  scenarios 
around  the  baseline, to  illustrate the  impact 
of changes in assumptions. The ‘historical SPB’ 
scenario  assumes  that  the  structural  primary 
balance (SPB) gradually returns to its past average 
level.  In  the  ‘lower  SPB’  scenario,  the  SPB  is 
permanently  weaker  than  in  the  baseline.  The 

Table A19.1: Debt sustainability analysis for Poland 

Source: European Commission 

59 

Table 1. Baseline debt projections20192020202120222023202420252026202720282029203020312032Gross debt ratio (% of GDP)45.657.153.850.849.848.046.846.147.448.349.350.652.253.9Change in debt-3.211.5-3.4-3.0-1.0-1.8-1.2-0.61.30.81.01.31.61.7of whichPrimary deficit-0.65.60.82.62.71.81.61.62.52.52.52.52.52.5Snowball effect-2.30.4-5.1-5.1-3.3-3.7-2.8-2.2-1.2-1.6-1.4-1.2-0.9-0.8Stock-flow adjustment-0.35.50.9-0.4-0.50.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)4.615.67.57.48.38.07.67.68.58.78.99.19.49.6S1S2Overall index (pps. of GDP)0.54.4of whichInitial budgetary position1.12.6Debt requirement-0.7Ageing costs0.21.8of whichPensions-0.6-0.9Health care0.41.3Long-term care0.31.3Others0.00.0                                                                       Table 2. Breakdown of the S1 and S2 sustainability gap indicators25303540455055606570752019202120232025202720292031BaselineHistorical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioGraph 1. Deterministic debt projections (% of GDP)p10-p20p20-p40p40-p60p60-p80p80-p9025354555657520192020202120222023202420252026Graph 2. Stochastic debt projections(% of GDP)MedianBaseline 
 
 
 
  
 
Table A19.2: Heat map of fiscal sustainability risks for Poland 

(1) Debt level in 2032: 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 consolidation 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 the debt ratio exceeding in 2026 its 2021 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: European Commission (for further details on the Commission's multi-dimensional approach, see the 2021 Fiscal 
Sustainability Report). 

long-term  care,  and 
requirement 
measures  the  additional  adjustment  needed  to 
reach the 60% of GDP debt target. 

the  debt 

Finally,  the  heat  map  presents  the  overall 
fiscal  sustainability  risk  classification  (see 
Graph 2). The short-term risk category is based on 
the  S0  indicator,  an  early-detection  indicator  of 
fiscal  stress  in  the  upcoming  year.  The  medium-
term  risk  category  is  derived  from  the  debt 
sustainability  analysis  (DSA)  and  the  S1  indicator. 
The DSA assesses risks to sustainability based on 
several  criteria:  the  projected  debt  level  in  10 
years’  time,  the  debt  trajectory  (‘peak  year’),  the 
plausibility  of  fiscal  assumptions  and  room  for 
tighter  positions  if  needed  (‘fiscal  consolidation 
space’),  the  probability  of  debt  not  stabilising  in 
the  next  5  years  and  the  size  of  uncertainty.  The 
long-term  risk  category  is  based  on  the  S2 
indicator and the DSA.  

and stochastic simulations, most of which point to 
low risks (see Graphs 1 and 2). On the other hand, 
the sustainability gap indicator S1 signals medium 
risks,  as  a  consolidation  effort  of  0.5 pp.  of  GDP 
would  be  needed  to  prevent  debt  from  exceeding 
60%  of  GDP  in  15  years’  time  (see  Table 2). 
Overall, the medium risks mainly reflect the initial 
primary deficit and the projected increase in public 
expenditure on health care and long-term care. 

Long-term  risks  to  fiscal  sustainability  are 
medium.  Over  the  long  term,  the  sustainability 
gap  indicator  S2  (at  4.4  pps.  of  GDP)  points  to 
medium  risks,  while  the  DSA  points  to  low  risks, 
leading  to  the  overall  medium  risk  assessment. 
The  S2  indicator  suggests  that,  to  stabilise  debt 
over the long term, it will be necessary to address 
budgetary  pressures  stemming  from  long-term 
care and health care (see Table 2).   

to 

risks 

short-term 

fiscal 
Overall, 
sustainability are low. The Commission’s early-
detection  indicator  (S0)  does  not  signal  major 
short-term  fiscal  risks  (see  Graph 2).  Moreover, 
gross  financing  needs  are  expected  to  remain 
moderate in the short term (see Table 1). 

Medium-term  risks  to  fiscal  sustainability 
are  medium.  On  the  one  hand,  the  debt 
sustainability analysis (DSA) points to low risks. In 
the  baseline,  government  debt  is  projected  to 
remain  below  60%  of  GDP  until  2032  (see 
Table 1). This debt path is fairly robust to possible 
shocks  to  fiscal,  macroeconomic  and  financial 
variables,  as  illustrated  by  alternative  scenarios 

60 

BaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallLOWLOWMEDIUMLOWLOWLOWDebt level (2032), % GDP5452605854Debt peak year20322021203220322032Fiscal consolidation space81%78%86%81%81%Probability of debt ratio exceeding in 2026 its 2021 level14%Difference between 90th and 10th percentiles (pps. GDP)17MEDIUMMEDIUMDeterministic scenariosStochastic projectionsLOWMEDIUMMEDIUMLOWShort termMedium termLong termOverall                               (S0)Overall     (S1+DSA)S1Debt sustainability analysis (DSA)S2Overall     (S2+DSA)Overall