Macroeconomic environment

TAURON Capital Group’s core business operations are conducted on the Polish market and the changes taking place in this market have an impact on the Group’s operations.

The macroeconomic situation, both in the individual sectors of the economy, as well as on the financial markets, is a significant factor impacting the earnings generated by TAURON Capital Group.

According to data published by Statistics Poland (GUS), Poland’s GDP growth rate stood at 3.6% in the third quarter of 2022, year on year. In the subsequent years, the National Bank of Poland (NBP) is forecasting a decline of the GDP growth rate to 0.7% in 2023, 2.0% in 2024 and 3.1% in 2025 (year on year). The economic situation on the domestic market in the time frame covered by the projection will be affected by a strong negative supply shock as a result of the Russian Federation’s aggression against Ukraine – mainly the rise in the global commodity prices and the NBP's interest rate hikes. On the other hand, the shielding measures for households and vulnerable entities providing protection against energy price increases and the compensation payments for businesses will have a positive impact. The negative effects of the supply shock are assumed to be gradually expiring in the 2024 – 2025 time frame.

The situation on the labor market remains good. According to the Statistics Poland’s data, the unemployment rate, as of the end of 2022, came in at 5.2% (year on year). The NBP is forecasting a continued favorable situation on the labor market – the maintaining of a high nominal rate of the wage growth along with a moderate increase in the unemployment rate.

According to the Statistics Poland’s data, the average annual inflation rate clocked in at 14.4% in 2022. At the end of 2022, the inflation rate stood at 16.6%, year on year. Over the 2023 – 2025 time frame, the inflation rate is projected to gradually decline to 13.1% in 2023, 5.9% in 2024, and to 3.5% in 2025. The decrease in the level of the inflation rate over the next three years will be affected by the expiration of the factors that had driven the rise in the inflation rate in 2022, namely, the reduction in the prices of the energy raw materials and agricultural commodities on the global markets, the slowdown in the growth rate of the domestic demand, the recovery of the supply chains, the slowdown of the inflation rate abroad, and the decelerating growth rate of the labor costs.

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