Poland Economy - overview

Economy - overview: Poland has pursued a policy of economic liberalization since 1990 and today stands out as a success story among transition economies. In 2008, GDP grew an estimated 4.8%, based on rising private consumption, a jump in corporate investment, and EU funds inflows. GDP per capita is still much below the EU average, but is similar to that of the three Baltic states. Since 2004, EU membership and access to EU structural funds have provided a major boost to the economy. Unemployment is falling rapidly, though at roughly 9.7% in 2008, it remains above the EU average. In 2008 inflation reached 4.3%, more than the upper limit of the National Bank of Poland's target range, but has been falling due to global economic slowdown. Poland's economic performance could improve further if the country addresses some of the remaining deficiencies in its business environment. An inefficient commercial court system, a rigid labor code, bureaucratic red tape, and persistent low-level corruption keep the private sector from performing up to its full potential. Rising demands to fund health care, education, and the state pension system present a challenge to the Polish Government's effort to hold the consolidated public sector budget deficit under 3.0% of GDP, a target which was achieved in 2007-08. The PO/PSL coalition government which came to power in November 2007 plans to further reduce the budget deficit with the aim of eventually adopting the euro by 2012. The new government has also announced its intention to enact business-friendly reforms, reduce public sector spending growth, lower taxes, and accelerate privatization. The government, however, has moved slowly on major reforms. Pension and health-care bills passed through the legislature, but the legislature failed to overturn a presidential veto.

Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.

Source: CIA World Factbook - Unless otherwise noted, information in this page is accurate as of September 17, 2009