Trade, Innovation, and Productivity
On November 24th-27th, 2020, the third round of negotiations on the Economic Partnership Agreement between the European Union and five Eastern and Southern Africa (ESA) countries was held. For these countries, the EU is the most important trade partner, and the negotiations aim to strengthen and deepen the current interim Economic Partnership Agreement in force since 2012. The interim agreement is believed to have brought significant trade effects during the first eight years of its implementation. For instance, EU exports to some ESA countries (Madagascar, Seychelles, and Zimbabwe) have increased by almost 25% in 2018 since the agreement's implementation. The ESA countries have also seen a considerable improvement in their trade volume with the EU in the same period. In line with the current EU policy of signing new trade agreements, these negotiations aim to extend the current agreement beyond trade in goods to a comprehensive and extended economic agreement. These negotiations are also a part of the Africa-Europe Alliance for Sustainable Investment and Employment implementation process that started in 2018. The negotiations, ongoing since January 2020, focus on rules of origin, technical barriers to trade, customs, trade facilitation, sanitary and phytosanitary measures, agriculture, sustainable development, services trade, and investment liberalization, and digital trade. An extended trade agreement will contribute to a further increase in bilateral trade and investment flows between the involved partners and increase the current interim agreement's benefits. Also, it will contribute to regional economic development through regional value chain promotion.
Labour market and Environment
According to the Ministry of Family, Labour and Social Policy, the unemployment rate in Poland has remained unchanged for the last three months (6.1%) despite the pandemic restrictions. The Ministry has thus concluded that the situation on the labour market in Poland has stabilised. Nevertheless, the Diagnoza.Plus study, performed by GRAPE in partnership with CASE, has shown that the assessment of the situation on the labour market based solely on the unemployment rate is misleading and completely unsatisfactory. This is because to be defined as unemployed in the official statistics a person has to meet several criteria i.e., being registered as unemployed in the Labour Office, actively look for employment, and being ready to undertake the employment. Yet, the Diagnoza.plus study showed that almost one in six people that do not work due to pandemic, did not register as unemployed. There are many reasons behind that, including the Labour Offices being closed, the unavailability of Active Labour Market Policies upskilling and reskilling the individuals as well as fear of being infected that prevented people from going outside. Only people in urgent need of the healthcare insurance or unemployment benefits were more keen on registering as unemployed during pandemic. The ability to undertake employment, one of the conditions to be defined as unemployed, also decreased due to the healthcare situation, possible quarantines, or lack of childcare assistance. Considering such circumstances, the best way to look at the labour market situation during pandemic would be to observe the number of people employed as well as their working conditions. Read more on the topic at Diagnoza.plus website.
Macro and Fiscal
Despite base inflation reaching values unobserved for years (4.3% in November according to NBP), prices of main Christmas products in Poland grew only slightly since last year. Online CASE CPI index points to ca. 1.3% increase in food category over the last 12 months. However, prices of some products were highly volatile. This concerns price of cabbage that went down by 12.3% over the last year, beetroots - decrease by 15.1%, coffee – down by 6.4%. Price of cold cuts went up by 5.1%, bread - by 1.5% and crucially, tangerines – increase by 18.6%. Unfortunately, some of the typical products used as gift are also more expensive. Prices of books went up by 5.9%, electronics – by 8.2%, and cosmetics - by 3.6% more. On the other hand, sweets and delicacies are 4.2% and 5.4% cheaper, respectively. Currently, the overall index for prices in Poland is mainly driven by significant increases in prices of services (7.8%) and electricity (9.1%).