Macroeconomic situation

The autumn economic forecast of the European Commission (EC) highlights the slow and gradual but steady recovery from economic stagnation in European Union countries. EC analysts are cautiously optimistic about domestic demand in the coming quarters. It is the domestic consumption that is seen as the main driver of economic growth in the coming periods.

The growth in domestic demand is supported by reduced inflationary pressure, rising disposable income of households and increasing employment. On the other hand, persistent effects of high inflation from recent years continue to affect the level of economic uncertainty. Combined with elevated interest rates, households continue to demonstrate an above-average propensity to save and reap the financial benefits of capital allocation. Economic growth still depends to a large extent on the European Central Bank, which has already started a cycle of easing its monetary policy, and on national central banks (including the National Bank of Poland), which develop their own policies¹. According to Eurostat’s flash estimate, GDP growth in 2024 in the EU as a whole amounted to 0.9% y/y².

¹ Source: European Commission, Autumn 2024 Economic Forecast, November 2024.
² Source: Eurostat, ec.europa.eu/eurostat/web/products-euro-indicators/w/2-14022025-ap.

Source: CSO, Hungarian Central Statistical Office, State Statistics Service of Ukraine.

According to preliminary estimates, the gross domestic product in 2024 recorded a real growth of 2.9%, compared to an increase of 0.1% in 2023. The preliminary estimate of GDP for Q4 of 2024 indicates a 3.2% dynamics compared to 1.0% in the same period of the previous year ³.

Industrial production sold in 2024 increased by 0.3% compared to a decrease of 1.5% recorded in 2023 ⁴. Total retail sales increased by 1.0% y/y in 2024. Construction and assembly production decreased by 8.0% y/y.

The labour market still records low unemployment rates, which at the end of December 2024 amounted to 5.1%, which represents a decrease by 0.1% y/y. Concurrently, the average salary in the enterprise sector in Poland in 2024 amounted to PLN 8,265.92, which stands for a nominal increase of 11.0% compared to the previous year. In real terms (taking into account inflation), wages increased by 7.0% throughout 2024, compared to a 0.5% surge throughout 2023.

As for housing construction, a continued decline in the number of apartments completed was observed. According to CSO’s data in 2024, 199.9 thousand apartments were commissioned (a decrease by 9.6% y/y). For the second year in a row, the sector is recording negative dynamics, which is a consequence of higher credit costs and difficult access to home loans. However, after the shock caused by the rise in interest rates, the market is starting to stabilise, as evidenced by the significantly higher numbers of issued building permits or notifications with a construction project (in 2024 – 290.7 thousand, which represents +20.3% y/y) and notifications of started construction sites (in 2024 – 233.8 thousand, which represents +23.7% y/y).

Throughout 2024, CPI inflation reached 3.6% y/y, and in Q4 alone it amounted to 4.8% y/y. The central NBP forecast indicates that in 2025 the inflation is to reach 5.6% on an annual basis. Price dynamics is expected to approach the inflation target (2.5% +/- 1%) in Q1 of 2026⁵.

The European Commission estimates the national GDP in 2025 at the level of 3.6% and inflation forecast is at 4.7%⁶. The International Monetary Fund expects slightly lower GDP growth of 3.5% in 2025⁷.

³ Source: Central Statistical Office, Flash estimate of gross domestic product for Q4 2024, February 2025.
⁴ Source of data for Poland: Central Statistical Office, Socio-economic situation of the country, February 2025 – unless otherwise indicated.
⁵ Source: National Bank of Poland, Inflation and GDP projection – November 2024, February 2025.
⁶ Source: European Commission, Economic forecast for Poland, February 2025.
⁷ Source: International Monetary Fund, World Economic outlook update, February 2025.

The Gross Domestic Product in Hungary in 2024 increased by 0.5%. In Q4 of 2024, GDP dynamics was, according to a flash estimate, 0.4%, while in the previous quarters it reached: 1.1%, 1.5% and -0.8%, respectively⁸.

Between January-December 2024, the average gross salary in Hungary amounted to HUF 646,800 (approx. PLN 6,694), which represents an increase by 13.2% compared to the same period of the previous year. In real terms (taking into account inflation), wages increased by 9.2% throughout 2024, compared to a 2.9% decline in 2023. The unemployment rate in December reached 4.3%, which represents the same level as in December 2023.

Consumer prices in Hungary rose on average in 2024 by 3.7% compared to the previous year, and their increase in December was 4.6%.

In 2024 the volume of industrial production decreased by 4.0% y/y, and in December alone it fell by 5.3% compared to December 2023⁹. The volume of construction production in 2024 went down compared to the previous year’s level by 0.4%, and in December alone it decreased by 4.2% compared to December 2023. Between January-December 2024, 28.7% less apartments were commissioned than in the corresponding period of 2023, and the number of building permits for new apartments in the country fell by 4.7%.

According to the European Commission, the economic growth in Hungary may be shaped at the level of 1.8% in 2025, while inflation may amount to approx. 3.6%¹⁰. The International Monetary Fund forecasts that Hungary’s GDP will reach 2.9% in 2025¹¹.

_{⁸ Data source for Hungary: Hungarian Central Statistical Office (KSH) – unless otherwise indicated.}
_{⁹Referring to data adjusted for the number of working days in December 2024, the dynamics is -6.4% y/y.}
_{¹⁰ Source: European Commission, Economic forecast for Hungary, February 2025.}
_{¹¹ Source: International Monetary Fund, imf.org/en/Countries/HUN#countrydata.}

Despite troublesome war conditions, the Ukrainian economy has shown great resilience and continues to grow, albeit at a slower pace due to the impact of the war. According to the State Statistics Service of Ukraine (SSSU), Ukraine’s GDP in 2024 is to go up by 2.9% (compared to 5.5% in 2023)¹². In 2024, inflation was 6.5% (compared to 12.9% in 2023). Since May 2024, CPI inflation has been rising, reaching 12% in December, driven by higher prices for raw materials, supplies and electricity, as well as wage increases in the context of a continuing shortage of workers¹³.

In 2024, the NBU interest rate changed four times and at the end of 2024 it amounted to 13.5%¹⁴. The devaluation of UAH at the end of 2024 amounted to 10.6%¹⁵. According to the NBU, nominal wages increased by 22% in 2024 (compared to 17.4% in 2023), and unemployment fell to 13.1% (compared to 18.2% in 2023)¹⁶.

In 2024, the Ukrainian construction market grew by 6% in monetary terms compared to 2023. The main segments of commercial real estate investments were warehouses and retail facilities. In 2024, the total area of new commercial projects increased by 65% compared to 2023. Rebuilding and securing critical infrastructure accounts for approximately 20% of the construction market. Demand in primary residential property market increased by 12% in 2024¹⁷.

The World Bank forecasts that Ukraine’s economic growth is to slow to 2.0% in 2025. The forecast is based on the assumption that the war will last the entire year. The IMF predicts real GDP growth of 2.5% to 3.5%, while predicting that inflation will reach 7.5%¹⁸.

_{¹² Source: State Statistics Service of Ukraine (SSSU), gov.ua/operativ/menu/menu_e/nac_r.htm, April 2025.}_{¹³ Source: National Bank of Ukraine, gov.ua/admin_uploads/article/MMR_2025-01.pdf?v=9, January 2025.}_{¹⁴ Source: National Bank of Ukraine gov.ua/ua/news/all/natsionalniy-bank-ukrayini-pidvischiv-oblikovu-stavku-do-135, December 2024.}_{¹⁵ Source: Portal: minfin.com.ua/ua/economy/index/devaluation/}_{¹⁶ Source: National Bank of Ukraine (NBU), Inflation report – January 2025, February 2025.}_{¹⁷ Source: Portal: Open for business, open4business.com.ua/tag/rauta-uk/, January 2025.}_{¹⁸ Source: Portal: Minfin, minficom.ua/ua/2024/10/19/138128328/, October 2024.}

Changes in the exchange rates of the Group’s key currencies

In 2024, the Polish zloty strengthened against the EUR and weakened against the USD.

The data of the National Bank of Poland indicate that in 2024 the average EUR exchange rate fell to PLN 4.31, while in the previous year it was PLN 4.54. During the analysed period, the EUR/PLN exchange rate was volatile, oscillating between PLN 4.25 and PLN 4.40. The strengthening of the PLN against the EUR, calculated on the basis of the exchange rates from the end dates of the analysed period (31.12.2024 vs. 29.12.2023), amounted to 1.72%. At the end of 2024, the EUR/PLN exchange rate was PLN 4.27. The quotations featured relatively low volatility – the coefficient of variation, calculated on the basis of the standard deviation and the arithmetic mean, amounted to 0.76%.

The average USD exchange rate in 2024 fell to PLN 3.98 from PLN 4.20 in the previous year. In the analysed period the USD/PLN exchange rate ranged from PLN 3.81 to PLN 4.18. The weakening of the PLN against the USD, calculated on the basis of the exchange rates from the end dates of the analysed period, amounted to -4.22%. At the end of 2024, the USD/PLN exchange rate reached PLN 4.10, with the coefficient of variation of 1.85%.

The valuation of PLN during the reporting period was determined by both external factors – including: the war in Ukraine, the presidential election in the United States, the global increase in inflationary pressure, the interest rate policy of the leading central banks – and internal factors, including further decisions of the Monetary Policy Council on interest rates or negotiations with the European Union regarding the launch of the National Reconstruction Programme.

Source: NBP.

In 2024, the exchange rate of 100 HUF against the PLN decreased on average to PLN 1.09 from PLN 1.19 in the previous year. During this period, the 100 HUF/PLN exchange rate was volatile, oscillating from approximately PLN 1.03 to PLN 1.16. The appreciation of the PLN against the HUF calculated on the basis of the exchange rate from the end dates of the analysed period amounted to 8.26% (with the exchange rate at the end of 2024 at PLN 1.04), with the coefficient of variation of (2.40%).

Source: NBP.

In 2022, due to the extraordinary situation on the Ukrainian market, the Group introduced a change in the rules regarding the translation of financial statements of Śnieżka-Ukraina, for which the Ukrainian hryvnia (UAH) is the functional currency. The mentioned change applied also in 2024.

The policy that the Group applies when converting items expressed in foreign currencies is described in item 2.4.6. Translation of items expressed in foreign currencies of the Consolidated Financial Statements of the Śnieżka Group for 2024. In the context of the above changes, the Group adopted the closing rate as at December 31, 2024, set by the National Bank of Poland at which the Group exchanges UAH for PLN, i.e. 1 UAH = PLN 0.0974. The average HUF exchange rate at which the Group converted the financial data of the Ukrainian company in 2024 weakened by over 13% compared to 2023.

Source: NBP.

Key events – timetable

Condition of the sector