In 2014 Poland’s GDP grew 3.3%, following a 1.7% rise in 2013, according to preliminary estimates of the Central Statistics Office. The key growth driver was domestic demand, which improved 4.6% (compared with merely 0.2% a year before). Strong growth was recorded in the consumption of households (up 3.0% vs. 1.1% in 2013) and investment (up 9.4% vs. 0.9% in 2013). Net exports no longer had a positive impact on GDP in the period under review.
In 2014 Poland was one of the fastest growing economies in the EU. To compare − Germany’s economy, the largest in the EU, expanded by 1.5%.
GDP in the eurozone and the entire EU improved slightly in the third quarter, thanks mainly to Germany, which managed to avoid technical recession, and a faster growing France. Poland continues to be one of the leading EU Member States in terms of GDP growth rate.
In the long term, there is strong correlation between Poland’s GDP growth and rising natural gas consumption. This is an effect of many factors, including a stronger demand for gas as a chemical feedstock for production (e.g. plastics, fertilisers); growing affluence, which promotes a change in house heating systems from coal-fired boilers to cleaner and easier to maintain gas-fired ones; the extension of the gas network and a gradual shift in the Polish power sector towards low emission intensity, supported in particular by cogeneration CCGT units.
GDP growth rate in 2007-2014 (change compared with the previous year)
GDP growth rate in 2014 (change compared with the previous year)
Natural gas prices on European commodity exchanges
Apart from seasonal factors such as air temperature, in 2014 the natural gas prices on European markets were affected by limited supplies from Norway, resulting from stoppages scheduled for September, maintenance shutdowns of gas-fired power stations, but also the political situation in Ukraine, reduced supplies to Europe from Russia, and a decline in oil prices, which are still an element of the pricing formulas incorporated in many long-term contracts.
Further, the high levels of stocks held at gas storage facilities in Europe suggested weaker demand for gas in 2014.
As of September 2014, natural gas prices picked up on the Polish Power Exchange compared with NCG and TTF. The reasons for the wider spread between the price of natural gas on the Polish Power Exchange and in the neighbouring countries in the fourth quarter of 2014 were purely fundamental. Throughout the entire fourth quarter, gas supplies from sources east of Poland were significantly reduced. Concurrently, demand for gas grew steadily, as usual in the autumn and winter season. In these circumstances, with limited technical capacity to import gas from sources other than those located east of Poland, which were insufficient to cover the entire consumption, the market balance was disturbed as demand outstripped supply. This resulted in significantly higher activity of the demand side on transmission capacity auctions held by OGP Gaz-System SA. As a result, auction premiums rose to levels several times higher than tariff rates, which significantly increased the cost of cross-border transmission capacities. In turn, this marked growth in the cost of gas imports to Poland helped widen and preserve the difference between gas prices in Poland and the neighbouring countries. It is worth pointing out, however, that since the beginning of the first quarter of 2015, when OGP Gaz-System SA provided access to new large transmission capacities (a more than doubled capacity increase for imports from Germany through the Mallnow Reverse and Interconnection Points (PWP), to 5.5 bn m3 per annum), the above infrastructure constraints were largely removed, which brought the price spread back to levels seen before supplies from east of Poland were reduced.
Natural gas prices on European commodity exchanges (EUR/MWh)
Brent crude oil prices
Crude oil prices were depressed by forecasts of a slowing global economy. Disappointing industrial output data from the world’s two largest economies, the US and China, rekindled investor worries about falling global demand.
Amid continuing price declines and the strengthening US dollar, there was an increase in global crude oil supply. Supply also grew on the back of the shale revolution in the US, where the monthly crude oil output rose between January and December 2014 by more than 16%. Despite pressure from some OPEC countries, no production limits were introduced.
On the last day of 2014, the oil price was down 48% on the quotations from the beginning of the year.
Cena ropy naftowej na ostatni dzień 2014 roku była niższa od ceny na początek roku o 48%.
Brent crude oil prices (USD/bbl)
EUR/PLN and USD/PLN exchange rates
The first eight months of 2014 saw the Polish złoty strengthening against the euro and the US dollar, with the trend reversing in the following months. The exchange rates of the currencies grew to PLN 1 = EUR 4.26 and PLN 1 = USD 3.51 as at the last day of the year. The depreciation of the Polish złoty was caused by the weakness of the eurozone economy, tensions in Ukraine, and net capital outflows from developing economies.
The USD/PLN exchange rate was also affected by improving conditions in the US economy
and growing risk aversion in global markets
in connection with the falling oil prices.
