Economical overview
Poland has had good economic development
during the last quarter century. Nowadays, the Poles'
standard of living has reached 65 percent of the EU
average, compared with 25 percent in the transition to
market economy in the early 1990s. Poland has in recent
years experienced higher economic growth than the EU as
a whole.
Poland is traditionally an agricultural country, and
agriculture is still important, even though the
manufacturing industry, trade and service sector have
developed more since the transition to market economy.
Agriculture, like the important mining industry, has
problems with low productivity, but the sectors employ
just over a tenth of the labor force each. Industries
with good development are tourism, the manufacturing
industry and the pharmaceutical industry. The
construction industry has also gone well. The worst
development has been for the heavy industry, such as the
shipbuilding industry and the engineering industry.
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Countryaah.com:
Major imports by Poland, covering a full list of top products imported by the country and trade value for each product category.
Planning Economics and Transition Economics
During the communist era, heavy industry was
prioritized at the expense of agriculture and light
industry. The low productivity of the business sector,
high production costs, waste of resources, environmental
degradation and the inability of the government to meet
the needs of food, housing and consumer goods
contributed greatly to the collapse of the communist
system.
The market economy transformations that began in 1989
led to a reduced sense of security, constant changes,
closures and restructuring. The first democratic
government invested in achieving a rapid economic system
change. This was done through the so-called Balcerowicz
Plan. At one point, prices were released and most
government subsidies were abolished. The Polish
currency, złoty, was devalued and made convertible (that
is, it could be exchanged for western currency). The
market was opened to foreign competition and all export
restrictions were removed. Large parts of the heavy
industry were discontinued, while the consumer goods
industry and the service sector developed.
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including POL which represents the country of Poland.
The collapse of the command economy led to a sharp
economic downturn for all countries belonging to the
Eastern Bloc. During the first two years of the 1990s,
Poland's gross domestic product (GDP) fell by over 17
percent. Still, the country managed to transition to a
market economy better than other states of former
Eastern Europe, where the fall in GDP was in many cases
above 50 percent.
Long-term economic growth
Since 1992, the Polish economy has grown by about 4-5
percent per year on average. Around the middle of the
1990s, the economy grew at its fastest pace, while
falling into a weak 2001-2002. Growth then stopped at
about 1 percent. From 2003, GDP growth picked up again
and had an annual average of 6 percent in 2006-2008.
Even after the outbreak of the international
financial crisis in autumn 2008, the Polish economy
performed well. In 2009 and 2010, Poland, a member
country since 2004, was the only EU country with
positive growth. In 2011, Poland's growth was 4.3
percent, clearly better than the EU as a whole. The
economy has grown at about that rate ever since.
However, the European crisis affected Poland's
exports as well as domestic purchasing power, while
unemployment increased. The government partly succeeded
in counteracting this by budgetary tightening, which
strengthened the state's finances. By mid-2010 domestic
demand had risen again and the trade balance was
positive (ie exports exceeded imports).
More than two-thirds of Poland's exports and an
almost equal share of imports occur in the EU. Germany
is Poland's largest trading partner.
Faced with the economic crisis threatened by the
corona pandemic, the Polish government has promised
support measures (see Calendar). Employees and
self-employed persons who are placed without income must
receive part of their lost wages, companies must receive
credit guarantees and a deadline with commitments to the
state. The haulage industry fears noticeable effects
despite the EU's efforts to keep goods deliveries across
borders. Polish hauliers have about 30 percent of the
European market, with 4,000 transport companies and
400,000 drivers.
Waiting for the euro
In accordance with the conditions for Poland's EU
membership, the złotyn is to be replaced by the euro as
soon as it meets the requirements - that is, low
inflation, low debt and small budget deficits - and when
the situation in the euro zone has stabilized, the
Polish government now adds. The euro crisis caused
Poland to hold back, although the country could later
easily have been ready for the euro. Opinion polls in
recent years show that support for EU membership has
remained strong among the Poles surveyed, while up to
three quarters want to keep the złotyn.
At the same time, Poland is one of the EU members
receiving the most contributions from Brussels. In the
EU's six-year budget until 2013, Poland was able to
withdraw EUR 68 billion (close to SEK 600 billion) from
the Structural Funds and the Cohesion Fund (which will
help disadvantaged regions join the rest of the EU).
Partly because of this, Poland's economy has fared
better than the rest of the EU, including through
extensive road construction and major construction
projects ahead of the 2012 European Football
Championship.
Poland therefore led the fight against planned fund
cuts in the EU budget 2014-2020. The country claimed
that increased investment was a way out of the eurozone
crisis. But the Polish government risks losing influence
in Brussels, when at the same time it wants to postpone
the country's own entry into the euro zone. The
Conservative Government Party Law and Justice (PiS) has
also drawn legal conflicts with Poland on the EU,
including by reducing the independence of the judiciary
(see Current Policy).
A number of problems to solve
Even before the corona crisis, despite Poland's good
prospects, there were challenges. Unemployment remained
high, and dependence on EU support and foreign
investment (mainly from other EU countries) remained
high. Productivity in some sectors, not least
agriculture and the mining industry, is low.
The lack of job opportunities has caused many young
Poles to go abroad in search of work, which has drained
the country of well-educated labor. Another problem is
rising costs for an aging population. In order to keep
young people in the country (and secure a electoral
victory), the ruling Law and Justice promised before the
2019 parliamentary elections to abolish the income tax
for almost anyone under 26.
When the Conservative government took office in 2016,
it also launched a "Plan for Responsible Development",
which meant increased state control of the economy,
especially over the banking and media industries, which
the new governors considered too much dominated by
foreign ownership and capital. The government has also
revoked a decision on raising retirement age, which was
announced in Parliament in 2012. It is estimated to cost
EUR 2.3 billion annually (see Social conditions).
With several such expensive reforms in the baggage,
the government has also announced an upgrading of the
armed forces with large purchases of equipment (see
Calendar).
Since the start of democratization in 1989–1990, all
governments have promised a proper investment on the
motorways, but in reality construction has been slow.
Only when the European football championships were held
in Poland and Ukraine in 2012 were several new motorways
completed. Traffic congestion is increasing rapidly.
Accessibility, especially in large cities such as
Warsaw, has deteriorated over the years by rapid growth
as many more people have been able to buy a car.
The first high-speed railway, between Gdynia and
Kraków via Warsaw, was inaugurated in 2014.
The rivers play a relatively important role as
connecting routes within the country. The most important
ports on the Baltic Sea are Gdynia, Gdańsk and Szczecin.
The government plans to build a canal through the
Wisłanäset (Vistulanäset), which is a narrow land tongue
through the Baltic Sea in northeastern Poland. It will
allow vessels from the port of Elbląg to get out into
the Baltic without having to cross Russian waters
(Kaliningrad). The elblag canal from the 19th century,
which is reminiscent of the Göta canal, is mostly used
for leisure traffic.
Poland joined the EU Schengen cooperation in 2007,
which means that its borders are now open to all EU
citizens in the Schengen area. Most tourists come from
Germany, usually for trade. The price differences for
different goods can be large. Similar conditions exist
at other borders, although the price gap between Poland,
on the one hand, and Russia, Lithuania, Belarus
(Belarus), Ukraine, Slovakia and the Czech Republic, on
the other hand, are not the same. On both sides of the
borders, many trade is the main source of income.
About 30 spa resorts offer treatment with mud baths
and water from wells. Zakopane in the mountain range
High Tatra is an internationally known winter sports
resort.
FACTS - FINANCE
GDP per person
US $ 15 424 (2018)
Total GDP
US $ 585,783 M (2018)
GDP growth
5.1 percent (2018)
Agriculture's share of GDP
2.4 percent (2016)
Manufacturing industry's share of GDP
18.1 percent (2016)
The service sector's share of GDP
56.4 percent (2016)
Inflation
2.4 percent (2019)
Government debt's share of GDP
48.9 percent (2018)
Currency
PLN
Merchandise exports
US $ 253,946 million (2018)
Imports
US $ 260,055 million (2018)
Current account
- US $ 3 280 million (2018)
Commodity trade's share of GDP
90 percent (2018)
Main export goods
steel products and machinery, ships, rail cars, cars,
furniture and wood products, clothing, food, coal
Largest trading partner
Germany, UK, Russia, China, Italy
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