Economy of Poland
From Wikipedia, the free encyclopedia
| Economy of Poland | |
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| Currency | 1 zloty (PLN) = 100 groszy |
|---|---|
| Fiscal year | Calendar year |
| Trade organisations | EU, WTO and OECD |
| Statistics | |
| GDP (PPP) | $632 billion (2007) (21st) |
| GDP growth | 7% (2007) |
| GDP per capita | $16,600 (2007) |
| GDP by sector | agriculture (3%), industry (32%), services (66%) (2007) |
| Inflation (CPI) | 3% (Oct 2007) |
| Population below poverty line |
18% (2005) |
| Labour force | 20 million (2005) |
| Labour force by occupation |
agriculture (16%), industry (29%), services (55%) (2007) |
| Unemployment | 7.7%[1] |
| Main industries | machine building, iron and steel, coal mining, chemicals, shipbuilding, food processing, glass, beverages, textiles |
| External | |
| Exports | $110bn (2006) |
| Main export partners | Germany 27%, Italy 7%, France 6%, UK 6%, Czech Republic 6% (2006) |
| Imports | $126bn (2006) |
| Main import partners | Germany 24%, Russian Federation 10%, Italy 7%, the People's Republic of China 6%, France 6% (2006) |
| Public finances | |
| Public debt | 47% of GDP (2005) |
| Revenues | $68bn (2006) |
| Expenses | $77bn (2006) |
| Economic aid | $68 billion in available EU structural adjustment and cohesion funds (2007-13) |
| All values, unless otherwise stated, are in US dollars | |
Poland is considered to currently have one of the fastest growing economies in Central European nations, with an annual growth rate of over 6.0%.[2] Poland has steadfastly pursued a policy of economic liberalization throughout the 1990s, with positive results for economic growth but negative results for some sectors of the population. 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, which has been the main drive for Poland's economic growth. The agricultural sector remains handicapped by structural problems, surplus labor, inefficient small farms, and a lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal), has also been slow, but recent foreign investments in energy and steel have begun to turn the tide. Recent reforms in health care, education, the pension system, and state administration have resulted in larger than expected fiscal pressures. Improving this account deficit and tightening monetary policy, with focus on inflation, are priorities for the Polish government. Further progress in public finance depends mainly on privatization of Poland's remaining state sectors, the reduction of state employment, and an overhaul of the tax code to incorporate farmers, who currently pay significantly lower taxes than other people with similar income levels.
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[edit] Economic reform program
The economic reforms of the Balcerowicz plan introduced in 1990 removed price controls, eliminated most subsidies to industry, opened markets to international competition, and imposed strict budgetary and monetary discipline. Poland was the first former centrally planned economy in central Europe to end its recession and return to growth in the early 1990s. Since 1992, the Polish economy has enjoyed an accelerated recovery, although growth has recently slowed. The private sector now accounts for over two-thirds of the GDP.
As a result of Poland's growth and investment-friendly climate, the country has received over $50 billion in direct foreign investment since 1990. However, the government continues to play a strong role in the economy, as seen in excessive red tape and the high level of politicization in many business decisions. Investors complain that state regulation is not transparent or predictable; the economy suffers from a lack of competition in many sectors, notably telecommunications. In early 2002, the government announced a new set of economic reforms, designed in many ways to complete the process launched in 1990. The package acknowledges the need to improve Poland's investment climate, particularly the conditions for small and medium-sized enterprises, and better prepare the economy to compete as a member of the European Union. The government also aims to improve Poland's public finances to prepare for adoption of the Euro (planned 2011).
[edit] Foreign trade
With the collapse of the ruble-based COMECON trading bloc in 1991, Poland scrambled to reorient its trade. As early as 1996, 70% of its trade was with EU members, and neighboring Germany today is Poland's dominant trading partner. Poland joined the EU in May 2004. Before that, it fostered regional integration and trade through the Central European Free Trade Agreement (CEFTA), which included Hungary, the Czech Republic, Slovakia and Slovenia.
Most of Poland's imports are capital goods needed for industrial retooling and for manufacturing inputs, rather than imports for consumption. Therefore, a deficit is expected and should even be regarded as positive at this point. Poland is a member of the World Trade Organization and the European Union. It applies the EU's common external tariff to goods from other countries (including the U.S.). Most Polish exports to the U.S. receive tariff benefits under the Generalized System of Preferences (GSP) program.
Opportunities for trade and investment continue to exist across virtually all sectors. The American Chamber of Commerce in Poland, founded in 1991 with seven members, now has more than 300 members. Strong economic growth potential, a large domestic market, EU membership, and a high level of political stability are the top reasons U.S. and other foreign companies do business in Poland.
[edit] Foreign business in Poland
Polish law is rather favorable to foreign entrepreneurs. The government offers investors various forms of state aid, such as: CIT tax at the level of 19% and investment incentives in 14 Special Economic Zones (among others: income tax exemption, real estate tax exemption, competitive land prices), several industrial and technology parks, the possibility to benefit from the EU structural funds, brownfield and greenfield localizations. According to the National Bank of Poland (NBP) the level of FDI inflow into Poland in 2006 amounted to 13,9 billion Euro.
One of the main reasons why investors tend to choose Poland is its location at the very heart of continental Europe, part of the trans European road network and easy access to 250 million consumers within a radius of 1000 kilometers. Poland is a significant market of 38 million consumers driving 10% annual retail market growth. In the first quarter of 2007 Polish economy recorded the GDP growth at 7%, which makes it twice that of the EU average.
According to the Ernst & Young report, Poland ranks 7th in the world in terms of investment attractiveness. According to the OECD (www.oecd.org) report, in 2004 Poles were one of the hardest working nations in Europe. In the first half of 2007 the indicator of detected economic crimes was 95,3%. It is estimated that the selection of Poland as the co-organizer of the European Football Championships in 2012 will speed up a lot of investments carried out in Poland in the coming years. It will mainly be the investment in sectors such as road, railway and air infrastructure, as well as in the hotel, tourism, gastronomy and recreation industry.
Polish government has a specialized body that deals with foreign investors. Polish Information and Foreign Investment Agency offers support for foreign investors - assists and helps investors in all the necessary legal and administrative procedures.
[edit] Industry
Before World War II, Poland's industrial base was concentrated in the coal, textile, chemical, machinery, iron, and steel sectors. Today it extends to fertilizers, petrochemicals, machine tools, electrical machinery, electronics, cars and shipbuilding.
Poland's industrial base suffered greatly during World War II, and many resources were directed toward reconstruction. The communist economic system imposed in the late 1940s created large and unwieldy economic structures operated under a tight central command. In part because of this systemic rigidity, the economy performed poorly even in comparison with other economies in central Europe.
In 1990, the Mazowiecki government began a comprehensive reform program to replace the centralized command economy with a market-oriented system. While the results overall have been impressive, many large state-owned industrial enterprises, particularly the railroad and the mining, steel, and defense sectors, have remained resistant to the change and downsizing required to survive in a market-based economy.
[edit] Agriculture
Agriculture employs 16.1% of the work force but contributes only 3.8% to the gross domestic product (GDP), reflecting relatively low productivity. Unlike the industrial sector, Poland's agricultural sector remained largely in private hands during the decades of communist rule. Most of the former state farms are now leased to farmer tenants. Lack of credit is hampering efforts to sell former state farmland. Currently, Poland's 2 million private farms occupy 90% of all farmland and account for roughly the same percentage of total agricultural production. Farms are small—8 hectares on average—and often fragmented. Farms with an area exceeding 15 ha accounted for only 9% of the total number of farms but cover 45% of total agricultural area. Over half of all farm households in Poland produce only for their own needs with little, if any, commercial sales.
Poland is a net exporter of processed fruit and vegetables, meat, and dairy products. Processors often rely on imports to supplement domestic supplies of wheat, feed grains, vegetable oil, and protein meals, which are generally insufficient to meet domestic demand. However, Poland is the leading producer in Europe of potatoes and rye and is one of the world's largest producers of sugar beets and triticale. Poland also is a significant producer of rapeseed, grains, hogs, and cattle. Attempts to increase domestic feed grain production are hampered by the short growing season, poor soil, and the small size of farms.
For more see: http://www.paiz.gov.pl
[edit] Major Polish companies
- PKN Orlen - Petrochemical corporation
- Telekomunikacja Polska (TP S.A) - Telecom
- Polskie Sieci Elektroenergetyczne - National Power Company
- Polskie Górnictwo Naftowe i Gazownictwo - Natural Gas/ Oil
- PKO BP - Banking
- PZU - Insurance company
- Agora SA - Media
- PROKOM SA - IT
- Bioton - Biotechnology
- KGHM Polska Miedź - Copper mines and mills
- Kompania Węglowa - Mining
- Grupa Lotos - Petrochemical
- Polskie Koleje Państwowe (PKP) - National railway
- Poczta Polska - Polish Post
- Cersanit- Ceramic Goods
- Polnord- Real Estate Development
- TVN- Media
- Polimex-Mostostal- Engineering and Construction
- Globe Trade Centre - Real Estate Development
- Elektrim - Diversified utilities / mobile phone service
- Volkswagen Poznań - Automotive
- Fiat Poland - Polish branch of Fiat Group (former FSM), builds Panda, Fiat Nuova 500 and Fiat 600
- General Motors Poland - Automotive
- FSO Motors - Former Daewoo FSO. Produces Chevrolet Aveo, Lanos and Matiz automobiles
- Warsaw Stock Exchange
- VTS Clima Sp z.o.o - Air Handling Unit & Fan Coil Unit manufactures & HVAC solution providers
- Tele-Fonika Kable - Cabling manufacturer
[edit] Other statistics
Investment (gross fixed): 18.4% of GDP (2004 est.)
Household income or consumption by percentage share:
- lowest 10%: 3.2%
- highest 10%: 24.7% (1998)
Distribution of family income - Gini index: 30.6 (2004)
Agriculture - products: potatoes, fruits, vegetables, wheat, poultry, eggs, pork
Industrial production growth rate: 17.8% (2006)
Electricity:
- production: 150.8 TWh (2004)
- consumption: 121.3 TWh (2004)
- exports: 15.2 TWh (2004)
- imports: 5 TWh (2004)
Electricity - production by source:
- fossil fuel: 95.1%
- hydro: 4.5%
- other: 0.4% (2001)
- nuclear: 0%
Oil:
- production: 17,180 barrel/day (2001 est.)
- consumption: 424,100 barrel/day (2001 est.)
- exports: 53,000 barrel/day (2001)
- imports: 413,700 barrel/day (2001)
- proved reserves: 116.4 million barrel (1 January 2002)
Natural gas:
- production: 5.471 billion m³ (2001 est.)
- consumption: 13.85 billion m³ (2001 est.)
- exports: 41 million m³ (2001 est.)
- imports: 8.782 billion m³ (2001 est.)
- proved reserves: 154.4 billion m³ (1 January 2002)
Current account balance: $-3.831 billion (2004 est.)
Exports - commodities: machinery and transport equipment 37.8%, intermediate manufactured goods 23.7%, miscellaneous manufactured goods 17.1%, food and live animals 7.6% (2003)
Imports - commodities: machinery and transport equipment 38%, intermediate manufactured goods 21%, chemicals 14.8%, minerals, fuels, lubricants, and related materials 9.1% (2003)
Reserves of foreign exchange & gold: $41.88 billion (2004 est.)
Debt - external: $99.15 billion (2004 est.)
Currency exchange rates: Złoty per US Dollar - 2.17 (Apr 2008), 2.51 (Nov 2007), 2.66 (Oct 2006) 3.15 (Jun 2006) 3.7 (2004), 3.8891 (2003), 4.08 (2002), 4.0939 (2001), 4.3461 (2000). Złoty per Euro - 3.44 (Apr 2008), 3.64 (Nov 2007), 3.96 (Aug 2006), 4.77 (Jun 2004).
Unemployment: 11.7% January 2008
Average gross monthly pay: 3,027.51 PLN (880 EUR) (1395 USD) April 2008
[edit] History
This article discusses the economy of the current Poland, post-1989. For historical overview of past Polish economies, see:
- Economy of the People's Republic of Poland (1945-1989)
- Economy of the Second Polish Republic (1918-1939)
- Economy of the Polish-Lithuanian Commonwealth (1569-1795)
[edit] Growth
Recent GDP growth (comparing to the same quarter of previous year):
| Year | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| 2007 | 7.4% | 6.7% | 6.4% | 6.1% |
| 2006 | 5.5% | 5.8% | 6.3% | 6.7% |
| 2005 | 2.1% | 2.8% | 3.7% | 4.3% |
| 2004 | 7.0% | 6.1% | 4.8% | 4.9% |
| 2003 | 2.2% | 3.8% | 4.7% | 4.7% |
- Total 2003 3.7%
- Total 2004 5.4%
- Total 2005 3.3%
- Total 2006 6.1%
- Total 2007 6.5%
In January 2007, industrial output was up 15.6% annually.
Poland entered the European Union on 1 May 2004.
[edit] See also
[edit] References
- Worldmark Encyclopedia of National Economics, Volume 4 - Europe, Gale Group, 2002, ISBN 0-7876-4955-4
- Economic data from Eastern European Markets (ceeMarket.com)
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