| Date - Field | Poland - Economy - overview |
2008 January
Economy - overview | Poland has steadfastly pursued a policy of economic liberalization since 1990 and today stands out as a success story among transition economies. In 2007, GDP grew 6.5%, based on rising private consumption, a jump in investment, and burgeoning exports. Poland today has a thriving private sector. GDP per capita roughly equals that of the three Baltic states. Consumer price inflation - at 2.1% in 2007 - remains among the lowest in the EU. Since 2004, EU membership and access to EU structural funds has provided a major boost to the economy. Despite Poland's successes, more remains to be done. Unemployment, which stood at nearly 13% in 2007, is still one of the highest in the EU. Rising wages and falling unemployment pose a risk to consumer price stability. An inefficient commercial court system, a rigid labor code, bureaucratic red tape, and persistent corruption keep the private sector from performing to its potential. Expensive health care, education, pension, and state administration systems present a challenge to lowering the government budget deficit, which was over 3% of GDP in 2007. The new government plans to reduce its budget deficit with the aim of eventually adopting the euro. The pro-business PO government aims to introduce business-friendly measures, lower public debt, lower personal and corporate tax rates, reduce public spending and increase privatization, but failed to gain enough seats to rule alone, and will likely have to water down initiatives in order to garner enough support to pass its pro-business policies. |
2007 January
Economy - overview | Poland has steadfastly pursued a policy of economic liberalization since 1990 and today stands out as a success story among transition economies. Even so, much remains to be done, especially in bringing down the unemployment rate - still the highest in the EU despite recent improvement. The privatization of small- and medium-sized state-owned companies and a liberal law on establishing new firms has encouraged the development of the private business sector, but legal and bureaucratic obstacles alongside persistent corruption are hampering its further development. Poland's agricultural sector remains handicapped by surplus labor, inefficient small farms, and lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal, steel, railroads, and energy), while recently initiated, have stalled. Reforms in health care, education, the pension system, and state administration have resulted in larger-than-expected fiscal pressures. Further progress in public finance depends mainly on reducing losses in Polish state enterprises, restraining entitlements, and overhauling the tax code to incorporate the growing gray economy and farmers, most of whom pay no tax. The previous Socialist-led government introduced a package of social and administrative spending cuts to reduce public spending by about $17 billion through 2007, but full implementation of the plan was trumped by election-year politics in 2005. The right-wing Law and Justice party won parliamentary elections in September, and Lech KACZYNSKI won the presidential election in October 2005, running on a state-interventionist fiscal and monetary platform. Poland joined the EU in May 2004, and surging exports to the EU contributed to Poland's strong growth in 2004, though its competitiveness could be threatened by the zloty's appreciation. GDP per capita roughly equals that of the three Baltic states. Poland benefited from nearly $23.2 billion in EU funds, which were available through 2006. Farmers have already begun to reap the rewards of membership via booming exports, higher food prices, and EU agricultural subsidies. |
2006 January
Economy - overview | Poland has steadfastly pursued a policy of economic liberalization throughout the 1990s and today stands out as a success story among transition economies. Even so, much remains to be done, especially in bringing down unemployment. The privatization of small and medium-sized state-owned companies and a liberal law on establishing new firms has encouraged the development of the private business sector, but legal and bureaucratic obstacles alongside persistent corruption are hampering its further development. Poland's agricultural sector remains handicapped by surplus labor, inefficient small farms, and lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal, steel, railroads, and energy), while recently initiated, have stalled. Reforms in health care, education, the pension system, and state administration have resulted in larger-than-expected fiscal pressures. Further progress in public finance depends mainly on reducing losses in Polish state enterprises, restraining entitlements, and overhauling the tax code to incorporate the growing gray economy and farmers, most of whom pay no tax. The government has introduced a package of social and administrative spending cuts to reduce public spending by about $17 billion through 2007. Additional reductions are under discussion in the legislature but could be trumped by election-year politics in 2005. Poland joined the EU in May 2004, and surging exports to the EU contributed to Poland's strong growth in 2004, though its competitiveness could be threatened by the zloty's appreciation. GDP per capita roughly equals that of the three Baltic states. Poland stands to benefit from nearly $13.5 billion in EU funds, available through 2006. Farmers have already begun to reap the rewards of membership via higher food prices and EU agricultural subsidies. |
2005 January
Economy - overview | Poland has steadfastly pursued a policy of economic liberalization throughout the 1990s and today stands out as a success story among transition economies. Even so, much remains to be done, especially in bringing down unemployment. The privatization of small and medium-sized state-owned companies and a liberal law on establishing new firms has encouraged the development of the private business sector, but legal and bureaucratic obstacles alongside persistent corruption are hampering its further development. Poland's agricultural sector remains handicapped by surplus labor, inefficient small farms, and lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal, steel, railroads, and energy), while recently initiated, have stalled. Reforms in health care, education, the pension system, and state administration have resulted in larger-than-expected fiscal pressures. Further progress in public finance depends mainly on reducing losses in Polish state enterprises, restraining entitlements, and overhauling the tax code to incorporate the growing gray economy and farmers, most of whom pay no tax. The government has introduced a package of social and administrative spending cuts to reduce public spending by about $17 billion through 2007. Additional reductions are under discussion in the legislature but could be trumped by election-year politics in 2005. Poland joined the EU in May 2004, and surging exports to the EU contributed to Poland's strong growth in 2004, though its competitiveness could be threatened by the zloty's appreciation. GDP per capita roughly equals that of the three Baltic states. Poland stands to benefit from nearly $13.5 billion in EU funds, available through 2006. Farmers have already begun to reap the rewards of membership via higher food prices and EU agricultural subsidies. |
2004 January
Economy - overview | Poland has steadfastly pursued a policy of economic liberalization throughout the 1990s and today stands out as a success story among transition economies. Even so, much remains to be done. The privatization of small and medium state-owned companies and a liberal law on establishing new firms has encouraged the development of the private business sector, but legal and bureaucratic obstacles alongside persistent corruption are hampering its further development. Poland's agricultural sector remains handicapped by structural problems, surplus labor, inefficient small farms, and lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal, steel, railroads, and energy), while recently initiated, have stalled. Reforms in health care, education, the pension system, and state administration have resulted in larger than expected fiscal pressures. Further progress in public finance depends mainly on privatization of Poland's remaining state sector, the reduction of state employment, and an overhaul of the tax code to incorporate the growing gray economy and farmers, most of whom pay no tax. The government's determination to enter the EU has shaped most aspects of its economic policy and new legislation; in a nationwide referendum in November 2003, 77% of the voters voted in favor of Poland's EU accession, now scheduled for May 2004. Improving Poland's export competitiveness and containing the internal budget deficit are top priorities. Due to political uncertainty, the zloty has recently depreciated in relation to the euro, while currencies of the other euro-zone aspirants have been appreciating. GDP per capita equals that of the three Baltic states. |
2003 January
Economy - overview | Poland has steadfastly pursued a policy of economic liberalization throughout the 1990s and today stands out as a success story among transition economies. Even so, much remains to be done. The privatization of small and medium state-owned companies and a liberal law on establishing new firms allowed for the development of the private business sector, but legal and bureaucratic obstacles alongside persistent corruption are hampering its further development. Poland's large agricultural sector remains handicapped by structural problems, surplus labor, inefficient small farms, and lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal, steel, railroads, and energy), while recently initiated, has stalled due to a lack of political will on the part of the government. Structural reforms in health care, education, the pension system, and state administration have resulted in larger than expected fiscal pressures. Further progress in public finance depends mainly on privatization of Poland's remaining state sector, the reduction of state employment, and an overhaul of the tax code to incorporate the growing gray economy and farmers of whom most pay no tax. The government's determination to enter the EU has shaped most aspects of its economic policy and new legislation. Improving Poland's export competitiveness and containing the internal budget deficit are top priorities. Due to political uncertainty, the zloty has recently depreciated in relation to the euro and the dollar while currencies of the other euro-zone aspirants have been appreciating. |
2002 January
Economy - overview | Poland has steadfastly pursued a policy of liberalizing the economy and today stands out as one of the most successful and open transition economies. GDP growth had been strong and steady in 1993-2000 but fell back in 2001 with slowdowns in domestic investment and consumption and the weakening in the global economy. The privatization of small and medium state-owned companies and a liberal law on establishing new firms have allowed for the rapid development of a vibrant private sector. In contrast, Poland's large agricultural sector remains handicapped by structural problems, surplus labor, inefficient small farms, and lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal, steel, railroads, and energy) has begun. Structural reforms in health care, education, the pension system, and state administration have resulted in larger than expected fiscal pressures. Further progress in public finance depends mainly on privatization of Poland's remaining state sector. The government's determination to enter the EU as soon as possible affects most aspects of its economic policies. Improving Poland's outsized current account deficit and reining in inflation are priorities. Warsaw leads the region in foreign investment and needs a continued large inflow. |
2001 January
Economy - overview | Poland has steadfastly pursued a policy of liberalizing the economy and today stands out as one of the most successful and open transition economies. GDP growth has been strong and steady since 1992 - the best performance in the region. The privatization of small and medium state-owned companies and a liberal law on establishing new firms has allowed for the rapid development of a vibrant private sector. In contrast, Poland's large agricultural sector remains handicapped by structural problems, surplus labor, inefficient small farms, and lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal, steel, railroads, and energy) has begun. Structural reforms in health care, education, the pension system, and state administration have resulted in larger than expected fiscal pressures. Further progress in public finance depends mainly on privatization of Poland's remaining state sector. The government's determination to enter the EU as soon as possible affects most aspects of its economic policies. Improving Poland's outsized current account deficit and reining in inflation are priorities. Warsaw leads the region in foreign investment and needs a continued large inflow. |
2000 January
Economy - overview | Poland today stands out as one of the most successful and open transition economies. The privatization of small and medium state-owned companies and a liberal law on establishing new firms marked the rapid development of a private sector now responsible for 70% of economic activity. In contrast to the vibrant expansion of private non-farm activity, the large agriculture component remains handicapped by structural problems, surplus labor, inefficient small farms, and lack of investment. The government's determination to enter the EU as soon as possible affects most aspects of its economic policies. Improving Poland's worsening current account deficit and tightening monetary policy, now focused on inflation targeting, also are priorities. Warsaw continues to hold the budget deficit to around 2% of GDP. Structural reforms advanced in pensions, health care, and public administration in 1999, but resulted in larger than anticipated fiscal pressures. Further progress on public finance depends mainly on privatization of Poland's remaining state sector. Restructuring and privatization of "sensitive sectors" (e.g., coal and steel) has begun, but work remains to be done. Growth in 2000 should be moderately above 1999. |
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This page was last updated on 23 July, 2008 |
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