Economic Monitor
Economic Monitor July 2014 Jan Mazurek, Business Centre Club (BCC) expert
Key economic trends It is 25 years since the beginning of Poland’s transition to a new political and economic system. And it is 10 years since Poland became a member of the European Union. Thanks to these developments Poland is now a modern, democratic and rapidly growing economy. Twenty five years passed in June since Poland’s first democratic elections, which triggered big economic and social changes in the country. In this period, Poland made an unprecedented progress in its development. In 1989, foundations were laid for systemic changes, giving rise to the construction of a democratic state of law and the development of a market economy. As a result, Poland became a country credible in the international arena and with a strong economy. For 10 years now Poland has been a member of the European Union. Over this period its GDP doubled to reach PLN1,635.7 billion in 2013. Last year, Poland’s per-capita GDP at purchasing power parity accounted for 68% of the EU average compared to 49% of the EU
average 10 years ago. Funding from the European Union was one of the most important factors behind Poland’s growth. It contributed 0.7 pct. points to this growth annually. Another important growth factor was the inflow of foreign capital. Since 2004 the cumulative value of foreign direct investment in Poland has reached an equivalent of PLN400 billion and two million jobs were created. Thanks to the free movement of goods, Polish businesses have been very successful on EU markets. Since 2004 they have exported PLN3.5 trillion worth of goods to the EU, generating a trade surplus of PLN100 billion. Thanks to opportunities offered by the freedom to provide services within the EU, Polish firms have delegated abroad around 230,000 workers annually. Revenue from service exports to the EU has reached PLN550 billion, with a surplus of PLN37 billion. EU funding
adjusted GDP in constant prices with 2005 as the reference year rose in real terms by 1.1% quarter on quarter and 3.5% year on year. The non-seasonally adjusted GDP in average annual prices of the previous year rose in real terms by 3.4% year on year. In May 2014, the HSBC PMI (Purchasing Managers Index) for the Polish manufacturing sector fell from 52.0 points to 50.8 points, according to a monthly survey conducted by Markit. May was the third successive month to see a drop in the index, which reached the lowest level in 11 months. New orders, production and employment had the biggest impact on the downward trend. New export orders dropped for the first time since May 2013. According to the surveyed managers the situation in Ukraine has had a negative influence on the Polish economy. In the five months to the end of May, the sit-
has contributed significantly to the acceleration of the pace of modernization. In 20042013, investment spending rose by 75%. Polish farmers received PLN53.7 billion in direct payments from the EU budget. And Polish people gained access to the labour markets of other member states. Poland was the only country in Europe to have avoided recession during the recent global crisis. In the first quarter of 2014, the seasonally
uation on the labour market improved significantly. The unemployment rate dropped by 1.5 pct. points. And the number of unemployed registered with employment agencies fell below 2 million. The Monetary Policy Council kept interest rates on hold. The key rate has remained at 2.5% since July 2013.
7/2014 :: Polish Market :: I