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Poland’s economy

Send Print Download added: Małgorzata Kędzierska | 2016-06-21 11:09:53
economy, poland, gdp

Over the past 25 years , since the fall of the Iron Curtain, Poland has refashioned itself as a model for free-market economics.

It is the largest economy in Central Europe, the 6th largest in the EU and, depending on the measurement, 19th to 21st largest in the world. Due to its impressive GDP growth, it is rapidly converging with the largest western economies. For the last five years Poland has had cumulative growth in GDP of nearly 16 per cent, the most out of any country in Europe.

 

CEBR (Centre for Economics and Business Research) forecasts that by 2023, Poland will be among the world’s twenty biggest economies because until that time Poland’s steady economic development and improving living conditions will raise its GDP per capita to Western European levels.

 

With its skilled workforce and strong industrial traditions, Poland is Europe’s manufacturing and farming heartland and a major supplier of top quality food, electromechanical products, furniture, vehicles and aircrafts. Since 2000, Poland’s foreign trade turnover has increased more than threefold.

 

In 2013 exports represented nearly 50% of GDP up from only 27% in 2001. The EU is by far Poland’s largest trading partner accounting for about 80% of exports and 65% of imports. Poland’s key foreign market is Germany, which accounts for a quarter of exports.

 

Poland was the only economy in Europe to avoid a recession during the recent global financial crisis, benefiting from a depreciated real exchange rate, large domestic market, relatively low exposure to international trade, low household and corporate-sector debt leverage and stimulative fiscal and monetary policy.

 

Poland is the main beneficiary of EU Structural Funds, which will continue to subsidise some of the largest investments in infrastructure, human capital, innovation and ICT over the coming decade. Under the EU budget for 2007-2013 Poland received some €101.5bn which financed unprecedented investments in infrastructure and helped to boost Polish economy within past years. Since 2014 Poland will be receiving €105.8bn, making it once again the biggest beneficiary among member states. The scheduled funds will boost growth by up to 1.0 percentage point per year until at least 2020.

 

Poland maintains a floating currency, the zloty, which helps to keep Polish products competitive on world markets and insulates its economy from external shocks. The country has an independent central bank with a solid track record of responsible, anti-cyclical monetary policy, as well as a well-regulated and conservative banking system.

 

Poland’s constitution caps public debt at 60% of GDP – the government cannot take on any financial obligations that would cause that limit to be exceeded. To ensure the level is never breached, Poland has a self-imposed debt threshold of 55% of GDP.

 

Because Poland's labour costs remain considerably lower than in Western Europe, in recent years the country has become a top destination for business process outsourcing and other industries that require advanced skill sets. With one of Europe’s youngest and best educated populations, Poland delivers motivated talents across all industry segments. Almost 60% of young adults (aged 18-24) in Poland are enrolled in tertiary education, the second highest ratio among the OECD countries.

 

The dynamic growth of the Warsaw Stock Exchange (WSE) has made Warsaw the leading financial centre in Central and Eastern Europe, attracting a steady flow of IPOs, both domestic and foreign. WSE, as a well developing company, debuted on its own stock exchange platform in 2010.

 

Poland ranks as the 38th least corrupt out of 177 countries according to the international corruption watchdog Transparency International in the Corruption Perceptions Index for 2013. The 2013 result is a vast improvement on the 58th position Poland received in 2012.

 
 Poland - emerging innovation leader - raport: CEED Institute
 
MSZ