Poland - Economy

Economy

Poland's high-income economy is considered to be one of the healthiest of the post-Communist countries and is currently one of the fastest growing within the EU. Having a strong domestic market, low private debt, flexible currency, and not being dependent on a single export sector, Poland is the only European economy to have avoided the late-2000s recession. Since the fall of the communist government, Poland has steadfastly pursued a policy of liberalising the economy and today stands out as a successful example of the transition from a centrally planned economy to a primarily market-based economy. In 2009 Poland had the highest GDP growth in the EU. As of February 2012, the Polish economy has not entered a recession in the wake of the global financial crisis.

The privatization of small and medium state-owned companies and a liberal law on establishing new firms have allowed the development of an aggressive private sector. As a consequence, consumer rights organizations have also appeared. Restructuring and privatisation of "sensitive sectors" such as coal, steel, rail transport and energy has been continuing since 1990. Between 2007 and 2010, the government plans to float twenty public companies on the Warsaw Stock Exchange, including parts of the coal industry. The biggest privatisations have been the sale of the national telecoms firm Telekomunikacja Polska to France Télécom in 2000, and an issue of 30% of the shares in Poland's largest bank, PKO Bank Polski, on the Polish stockmarket in 2004.

The Polish banking sector is the largest in central and eastern Europe as well being as the largest and the most highly developed sector of the country’s financial markets. It is regulated by the Polish Financial Supervision Authority. During the transformation to a market-oriented economy, the government privatized some banks, recapitalized the rest and introduced legal reforms that made the sector competitive. This has attracted a significant number of strategic foreign investors. Poland’s banking sector has approximately 5 domestic banks, a network of nearly 600 cooperative banks and 18 branches of foreign-owned banks. In addition, foreign investors have controlling stakes in nearly 40 commercial banks, which make up 68% of the banking capital.

Poland has a large number of private farms in its agricultural sector, with the potential to become a leading producer of food in the European Union. Structural reforms in health care, education, the pension system, and state administration have resulted in larger-than-expected fiscal pressures. Warsaw leads Central Europe in foreign investment. GDP growth had been strong and steady from 1993 to 2000 with only a short slowdown from 2001 to 2002.

The economy had growth of 3.7% annually in 2003, a rise from 1.4% annually in 2002. In 2004, GDP growth equaled 5.4%, in 2005 3.3% and in 2006 6.2%. According to Eurostat data, Polish PPS GDP per capita stood at 61% of the EU average in 2009.

Although the Polish economy is currently undergoing economic development, there are many challenges ahead. The most notable task on the horizon is the preparation of the economy (through continuing deep structural reforms) to allow Poland to meet the strict economic criteria for entry into the Eurozone. According to the Polish foreign minister Radosław Sikorski the country could join the eurozone before 2016. Some businesses may already accept the euro as payment. In addition, the ability to establish and conduct business easily has been cause for economic hardship as the World Economic Forum recently ranked Poland near the bottom of OECD countries in terms of the clarity, efficiency and neutrality of its legal framework for firm to settle disputes. A report concluded that on-going foreign business disputes issues may "have damaged Poland’s reputation as an attractive location for FDI" by reinforcing the impression of "Poland’s substandard reputation for maintaining an efficient and neutral framework to settle business disputes involving multinational foreign investors." Ernst & Young's 2010 European attractiveness survey reported that Poland saw a 52% decrease in FDI job creation and a 42% decrease in number of FDI projects since 2008.

Average salaries in the enterprise sector in December 2010 were 3,848 PLN (1,012 euro or 1,374 US dollars) and growing sharply. Salaries vary between the regions: the median wage in the capital city Warsaw was 4,603 PLN (1,177 euro or 1,680 US dollars) while in Kielce it was only 3,083 PLN (788 euro or 1125 US dollars). Differences in salaries in various districts of Poland is even higher and range from 2,020 PLN (517 euro or 737 US dollars) in Kępno County, which is located in Greater Poland Voivodeship to 5,616 (1,436 euro or 2,050 US dollars) in Lubin County, which lies in Lower Silesian Voivodeship.

According to a Credit Suisse report, Poles are the second wealthiest (after Czechs) of the Central European peoples. This makes Poland an attractive destination for many guest workers particularly from Ukraine, Belarus, Russia and Vietnam. Even though Poland is rather an ethnically homogeneous country, the number of foreigners is growing every year.

Since the United Kingdom, Ireland and some other European countries opened their job markets for Poles, many workers, especially from rural regions, have left the country to seek a better wages abroad. However, there is a rapid growth of the salaries, booming economy, strong value of Polish currency, and quickly decreasing unemployment (from 14.2% in May 2006 to 6.7% in August 2008). Commodities produced in Poland include: electronics, cars (Arrinera, Leopard), buses (Autosan, Solaris, Solbus), helicopters (PZL Świdnik), transport equipment, locomotives, planes (PZL Mielec), ships, military engineering (including tanks, SPAAG systems), medicines (Polpharma, Polfa), food, clothes, glass, pottery (Bolesławiec), chemical products and others.