ECONOMY - CHOSEN ISSUES
Basic data:
Inflation : 2,4%
Increase of the GDP in 2004 : 4,8%
GDP per capita : 11,600 USD
Transformation
Since 1989 Poland has made a transition to free market economy.
What was particularly characteristic of Polish transformation was an explosive emergence of small
companies which co-occurred with the transformations in Poland at the beginning of the nineties.
The small and medium-sized enterprises constitute 99.83% of the overall number of business in
Poland and they employ over 40% of working citizens. Therefore, they are the most numerous group of
employers. At the same time, they generate 48.4 % of the GDP. However, their share in the
generation of the GDP is still lower than the average in the European Union.
From the beginning of the nineties, Poland went through the whole
economic cycle, with the period of economic acceleration (1992 -1994), time of prosperity (mid
1990's), economic slowdown (1999-2000) and stagnation (2001-2002). Since 2004 the GDP rate has
become to increase and reached 4.8%.
Current situation
Poland is one of the poorest countries in the enhanced European Union as the Gross Domestic Product
per capita constitutes about 45% of the EU average. The structure of employment in Poland is less
favorable in comparison to economically developed European countries. The percent of people
employed in services is also lower.
Structure of employment:
> agriculture: 27%
> industry: 24%
> services: 49%
PROBLEMS AND CHALLANGES
Unemployment and problems of the
labour market
The economic growth in Poland has a jobless character and can be contributed to an
increase in total factors productivity. In consequence, despite observed economic growth in recent
years, employment years remained unchanged. At present the employment rate in Poland is the lowest
among all EU member states.
The main problems are:
- unemployment (19%), which is of structural character in Poland (The determinants are: age, region
of Poland, education, place of living: rural areas or towns)
- low professional activity
- low employment rate
Balancing public
expenditure
Poland has a very big budget deficit amounting to 58% of GDP. Public finance reform and balancing
public expenditure are the most serious economical challenges. The accession to the EU provides
Poland with opportunities for development. Without public finance reform Poland will not be able to
collect enough public sources for projects co-financed from the EU.
Social expenditure constitutes almost half of the State's budget.
In Poland they are much more concentrated on social transfers (old age pensions, disability
pensions, family pensions, sickness benefits) rather than on pro-development expenditure, e.g.
pro-active programmes of labour market.
