Business in Poland faces strong headwinds

robust recovery last year from the pandemic-induced contraction of the economy, Polish industry also had a strong start to 2022. Beating expectations, industrial output increased by 17.3% year on year in March, the first full month after Russia attacked Ukraine, and manufacturing grew by 12.4%. Higher output from energy and mining as well as heavy industries compensated for a decrease in production of cars and parts. But the rebound is likely to be short-lived.The war in neighbouring Ukraine had no big impact on businesses in the first quarter, as companies still had full order books. But the outlook for the rest of the year is far less optimistic, according to , a Dutch bank. The fighting in Ukraine has increased the risk of serious disruptions to supply chains, creating a deep crisis of confidence. The rate of inflation was already high before the war, but it is now in double digits and continues to climb, putting pressure on production costs. And the anti-business bent of Law and Justice (i), the populist party in power, will become even more pronounced as Poland prepares for parliamentary elections that will take place in the autumn next year.