Professor Witold Orłowski on the impact of coronavirus on the economy

Assuming that there will be no further dramatic developments in the COVID-19 pandemic - I stress once again if the really worst-case scenario (from an epidemiological point of view) does not come true and within 1-2 months the situation will start to calm down - the general economic effects will be serious, but not catastrophic.

We already have severely disrupted value creation and supply chains because we live in a globalized economy. The scale of trade and production links between major economies and China is so large that we will see disruptions in many areas, even where we do not expect them at all.

The effects of falling production and their impact on global GDP will of course be significant. For now, it is not known whether there will be a global recession, but a recession in Europe is very likely. How much will it cost a country like Poland? Today, it is impossible to estimate it precisely. It must be remembered that we had serious symptoms of a slowing economy before the appearance of the COVID-19 effect. So I would not be surprised that in a negative scenario we could land at the end of this year with a 0% GDP growth dynamic.

The economic slowdown will affect all of Europe - because European countries have very strong ties with China. If the main European exporter - Germany - fares worse, it will affect the entire continent. The so-called industrial recession, i.e. a decrease in production, will probably appear in Poland from March, with strong decreases in the following months. The most important question today is whether in the second half of the year moods will calm down and the economy will recover. If so, I expect a serious slow down in Poland, but not a deep recession.

Professor Witold Orłowski, PwC's chief economic advisor in Poland