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Poland vs. Ukraine

Economy

PolandUkraine
Economy - overview

Poland has the sixth-largest economy in the EU and has long had a reputation as a business-friendly country with largely sound macroeconomic policies. Since 1990, Poland has pursued a policy of economic liberalization. During the 2008-09 economic slowdown Poland was the only EU country to avoid a recession, in part because of the government’s loose fiscal policy combined with a commitment to rein in spending in the medium-term Poland is the largest recipient of EU development funds and their cyclical allocation can significantly impact the rate of economic growth.

The Polish economy performed well during the 2014-17 period, with the real GDP growth rate generally exceeding 3%, in part because of increases in government social spending that have helped to accelerate consumer-driven growth. However, since 2015, Poland has implemented new business restrictions and taxes on foreign-dominated economic sectors, including banking and insurance, energy, and healthcare, that have dampened investor sentiment and has increased the government’s ownership of some firms. The government reduced the retirement age in 2016 and has had mixed success in introducing new taxes and boosting tax compliance to offset the increased costs of social spending programs and relieve upward pressure on the budget deficit. Some credit ratings agencies estimate that Poland during the next few years is at risk of exceeding the EU’s 3%-of-GDP limit on budget deficits, possibly impacting its access to future EU funds. Poland’s economy is projected to perform well in the next few years in part because of an anticipated cyclical increase in the use of its EU development funds and continued, robust household spending.

Poland faces several systemic challenges, which include addressing some of the remaining deficiencies in its road and rail infrastructure, business environment, rigid labor code, commercial court system, government red tape, and burdensome tax system, especially for entrepreneurs. Additional long-term challenges include diversifying Poland’s energy mix, strengthening investments in innovation, research, and development, as well as stemming the outflow of educated young Poles to other EU member states, especially in light of a coming demographic contraction due to emigration, persistently low fertility rates, and the aging of the Solidarity-era baby boom generation.

After Russia, the Ukrainian Republic was the most important economic component of the former Soviet Union, producing about four times the output of the next-ranking republic. Its fertile black soil accounted for more than one fourth of Soviet agricultural output, and its farms provided substantial quantities of meat, milk, grain, and vegetables to other republics. Likewise, its diversified heavy industry supplied unique equipment such as large diameter pipes and vertical drilling apparatus, and raw materials to industrial and mining sites in other regions of the former USSR.

 

Shortly after independence in August 1991, the Ukrainian Government liberalized most prices and erected a legal framework for privatization, but widespread resistance to reform within the government and the legislature soon stalled reform efforts and led to some backtracking. Output by 1999 had fallen to less than 40% of the 1991 level. Outside institutions - particularly the IMF encouraged Ukraine to quicken the pace and scope of reforms to foster economic growth. Ukrainian Government officials eliminated most tax and customs privileges in a March 2005 budget law, bringing more economic activity out of Ukraine's large shadow economy. From 2000 until mid-2008, Ukraine's economy was buoyant despite political turmoil between the prime minister and president. The economy contracted nearly 15% in 2009, among the worst economic performances in the world. In April 2010, Ukraine negotiated a price discount on Russian gas imports in exchange for extending Russia's lease on its naval base in Crimea.

 

Ukraine’s oligarch-dominated economy grew slowly from 2010 to 2013 but remained behind peers in the region and among Europe’s poorest. After former President YANUKOVYCH fled the country during the Revolution of Dignity, Ukraine’s economy fell into crisis because of Russia’s annexation of Crimea, military conflict in the eastern part of the country, and a trade war with Russia, resulting in a 17% decline in GDP, inflation at nearly 60%, and dwindling foreign currency reserves. The international community began efforts to stabilize the Ukrainian economy, including a March 2014 IMF assistance package of $17.5 billion, of which Ukraine has received four disbursements, most recently in April 2017, bringing the total disbursed as of that date to approximately $8.4 billion. Ukraine has made progress on reforms designed to make the country prosperous, democratic, and transparent, including creation of a national anti-corruption agency, overhaul of the banking sector, establishment of a transparent VAT refund system, and increased transparency in government procurement. But more improvements are needed, including fighting corruption, developing capital markets, improving the business environment to attract foreign investment, privatizing state-owned enterprises, and land reform. The fifth tranche of the IMF program, valued at $1.9 billion, was delayed in mid-2017 due to lack of progress on outstanding reforms, including adjustment of gas tariffs to import parity levels and adoption of legislation establishing an independent anti-corruption court.

 

Russia’s occupation of Crimea in March 2014 and ongoing Russian aggression in eastern Ukraine have hurt economic growth. With the loss of a major portion of Ukraine’s heavy industry in Donbas and ongoing violence, the economy contracted by 6.6% in 2014 and by 9.8% in 2015, but it returned to low growth in in 2016 and 2017, reaching 2.3% and 2.0%, respectively, as key reforms took hold. Ukraine also redirected trade activity towards the EU following the implementation of a bilateral Deep and Comprehensive Free Trade Agreement, displacing Russia as its largest trading partner. A prohibition on commercial trade with separatist-controlled territories in early 2017 has not impacted Ukraine’s key industrial sectors as much as expected, largely because of favorable external conditions. Ukraine returned to international debt markets in September 2017, issuing a $3 billion sovereign bond.

GDP (purchasing power parity)$1,261,433,000,000 (2019 est.)

$1,206,640,000,000 (2018 est.)

$1,145,323,000,000 (2017 est.)

note: data are in 2010 dollars
$538.388 billion (2019 est.)

$521.524 billion (2018 est.)

$504.35 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate4.55% (2019 est.)

5.36% (2018 est.)

4.83% (2017 est.)
3.24% (2019 est.)

3.41% (2018 est.)

2.48% (2017 est.)
GDP - per capita (PPP)$33,221 (2019 est.)

$31,775 (2018 est.)

$30,160 (2017 est.)

note: data are in 2010 dollars
$12,810 (2019 est.)

$12,338 (2018 est.)

$11,871 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 2.4% (2017 est.)

industry: 40.2% (2017 est.)

services: 57.4% (2017 est.)
agriculture: 12.2% (2017 est.)

industry: 28.6% (2017 est.)

services: 60% (2017 est.)
Population below poverty line15.4% (2018 est.)1.1% (2019 est.)
Household income or consumption by percentage sharelowest 10%: 3%

highest 10%: 23.9% (2015 est.)
lowest 10%: 4.2%

highest 10%: 21.6% (2015 est.)
Inflation rate (consumer prices)2.1% (2019 est.)

1.7% (2018 est.)

2% (2017 est.)
7.9% (2019 est.)

11% (2018 est.)

14.4% (2017 est.)

note: Excluding the temporarily occupied territories of the Autonomous Republic of Crimea, the city of Sevastopol and part of the anti-terrorist operation zone
Labor force9.561 million (2020 est.)16.033 million (2017 est.)
Labor force - by occupationagriculture: 11.5%

industry: 30.4%

services: 57.6% (2015)
agriculture: 5.8%

industry: 26.5%

services: 67.8% (2014)
Unemployment rate5.43% (2019 est.)

6.08% (2018 est.)
8.89% (2019 est.)

9.42% (2018 est.)

note: officially registered workers; large number of unregistered or underemployed workers
Distribution of family income - Gini index29.7 (2017 est.)

33.7 (2008)
26.1 (2018 est.)

28.2 (2009)
Budgetrevenues: 207.5 billion (2017 est.)

expenditures: 216.2 billion (2017 est.)
revenues: 29.82 billion (2017 est.)

expenditures: 31.55 billion (2017 est.)

note: this is the planned, consolidated budget
Industriesmachine building, iron and steel, coal mining, chemicals, shipbuilding, food processing, glass, beverages, textilescoal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food processing
Industrial production growth rate7.5% (2017 est.)3.1% (2017 est.)
Agriculture - productsmilk, sugar beet, wheat, potatoes, triticale, maize, barley, apples, mixed grains, ryemaize, wheat, potatoes, sunflower seed, sugar beet, milk, barley, soybeans, rapeseed, tomatoes
Exports$394.848 billion (2019 est.)

$375.525 billion (2018 est.)

$351.125 billion (2017 est.)
$161.231 billion (2019 est.)

$151.075 billion (2018 est.)

$153.046 billion (2017 est.)
Exports - commoditiescars and vehicle parts, seats, furniture, computers, video displays (2019)corn, sunflower seed oils, iron and iron products, wheat, insulated wiring, rapeseed (2019)
Exports - partnersGermany 27%, Czechia 6%, United Kingdom 6%, France 6%, Italy 5% (2019)Russia 9%, China 8%, Germany 6%, Poland 6%, Italy 5%, Turkey 5% (2019)
Imports$364.993 billion (2019 est.)

$353.423 billion (2018 est.)

$328.919 billion (2017 est.)
$207.335 billion (2019 est.)

$195.071 billion (2018 est.)

$189.402 billion (2017 est.)
Imports - commoditiescars and vehicle parts, crude petroleum,  packaged medicines, broadcasting equipment, office machinery/parts (2019)refined petroleum, cars, packaged medicines, coal, natural gas (2019)
Imports - partnersGermany 25%, China 10%, Italy 5%, Netherlands 5% (2019)China 13%, Russia 12%, Germany 10%, Poland 9%, Belarus 7% (2019)
Debt - external$351.77 billion (2019 est.)

$373.721 billion (2018 est.)
$117.41 billion (2019 est.)

$114.449 billion (2018 est.)
Exchange rateszlotych (PLN) per US dollar -

3.6684 (2020 est.)

3.8697 (2019 est.)

3.76615 (2018 est.)

3.7721 (2014 est.)

3.1538 (2013 est.)
hryvnia (UAH) per US dollar -

28.10001 (2020 est.)

23.7 (2019 est.)

27.80499 (2018 est.)

21.8447 (2014 est.)

11.8867 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt50.6% of GDP (2017 est.)

54.2% of GDP (2016 est.)

note: data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities, the data include subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions
71% of GDP (2017 est.)

81.2% of GDP (2016 est.)

note: the total public debt of $64.5 billion consists of: domestic public debt ($23.8 billion); external public debt ($26.1 billion); and sovereign guarantees ($14.6 billion)
Reserves of foreign exchange and gold$113.3 billion (31 December 2017 est.)

$114.4 billion (31 December 2016 est.)
$18.81 billion (31 December 2017 est.)

$15.54 billion (31 December 2016 est.)
Current Account Balance$2.92 billion (2019 est.)

-$7.52 billion (2018 est.)
-$4.124 billion (2019 est.)

-$6.432 billion (2018 est.)
GDP (official exchange rate)$595.72 billion (2019 est.)$155.082 billion (2019 est.)
Taxes and other revenues39.5% (of GDP) (2017 est.)26.6% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-1.7% (of GDP) (2017 est.)-1.5% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 9.9%

male: 9.6%

female: 10.3% (2019 est.)
total: 15.4%

male: 15.5%

female: 15.3% (2019 est.)
GDP - composition, by end usehousehold consumption: 58.6% (2017 est.)

government consumption: 17.7% (2017 est.)

investment in fixed capital: 17.7% (2017 est.)

investment in inventories: 2% (2017 est.)

exports of goods and services: 54% (2017 est.)

imports of goods and services: -49.9% (2017 est.)
household consumption: 66.5% (2017 est.)

government consumption: 20.4% (2017 est.)

investment in fixed capital: 16% (2017 est.)

investment in inventories: 4.7% (2017 est.)

exports of goods and services: 47.9% (2017 est.)

imports of goods and services: -55.6% (2017 est.)
Gross national saving20.1% of GDP (2019 est.)

19.4% of GDP (2018 est.)

19.5% of GDP (2017 est.)
12.1% of GDP (2019 est.)

15.2% of GDP (2018 est.)

17.8% of GDP (2017 est.)

Source: CIA Factbook