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Poland : Ensuring balanced growth and preparing for euro adoption key challenges ahead

Thu, 04/08/2010 - 1:27am
OECD

Contents | Executive summary | How to obtain this publication | Additional information 

 

   

The next Economic Survey of Poland  will be prepared for end 2011.

An Economic Survey is published every 1½-2 years for each OECD country. Read more about how Surveys are prepared.

The OECD assessment and recommendations on the main economic challenges faced by Poland are available by clicking on each chapter heading below.

The Policy Brief (pdf format) contains the OECD assessment and recommendations.

 

Bookmark this page : www.oecd.org/eco/surveys/poland 

 

Contents

Chapter 1: Ensuring a balanced recovery after the global downturn

Poland recorded the best real GDP growth performance among OECD countries in 2009. The economic crisis curbed the imbalances that had been growing since 2006. In the midst of the crisis, a sharp depreciation of the zloty provided a powerful underpinning to the economy, foreign parent banks supported their Polish affiliates and capital outflows seem to have been contained. Swift monetary policy reaction, macro-prudential measures, a small fiscal package, absorption of EU funds, government involvement to defend the zloty and IMF support all helped to restore confidence. Nevertheless, Poland was not spared from a significant slowdown and fiscal discipline has to be restored. Public-finance reforms should cover pension, tax and public-sector efficiency, while creating fiscal space for the absorption of unprecedented transfers from the European Union at the same time. The withdrawal of monetary stimulus should begin soon, to avoid the early re-appearance of demand pressure, if fiscal policy is not tightened significantly in the immediate future.

Chapter 2: Preparing for euro adoption

The chapter focuses on the major structural reforms necessary to prepare for euro adoption that should allow a sustainable fulfilment of the Maastricht criteria and maximisation of the ensuing various benefits. These reforms are desirable independent of the effective date of adoption, given the necessity to restore fiscal discipline, maintain price stability and ensure a balanced growth going forward. However, they are even more essential in the run up to euro adoption as the process of real and nominal convergence remains largely incomplete, which requires a substantial strengthening of alternative adjustment mechanisms to domestic interest- and exchange-rate changes. The reforms should aim to: create strong institutions to ensure fiscal sustainability and an efficient counter-cyclical rules-based fiscal policy supported by an independent fiscal council; promote flexibility in labour and product markets; and head off the risk of a boom-bust cycle triggered by much lower real interest rates, too rapid credit expansion and overblown perceived permanent income gains.

Chapter 3: Making the most of globalisation

Since its transformation 20 years ago, the Polish economy has become increasingly connected with the international economy. The implementation of market-economy principles and the increasing participation in globalisation have fostered convergence towards higher living standards and have led to a significant shift in sectoral specialisation. Yet according to most globalisation indicators, Poland lags behind other OECD countries in the region. Challenges are widespread to improve Poland’s position in global markets, as reflected by its performance in terms of inflows of foreign direct investment (FDI), benefits reaped from FDI and both volume and technological content of exports. These challenges cover the following areas: the privatisation process; development of transport and telecommunication infrastructures; the business environment; the role of the foreign investment agency (PAIiIZ); the future of Special Economic Zones; human capital; R&D; the role of SMEs; export promotion; and a better allocation of resources via downsized agriculture, enhanced labour mobility, increased competition and financial deepening.  

How to obtain this publication

 

The complete edition of the Economic Survey of Poland is available from:

 

Additional information

For further information please contact the Poland Desk at the OECD Economics Department at eco.survey@oecd.org.

The OECD Secretariat's report was prepared by Hervé Boulhol and Rafal Kierzenkowski under the supervision of  Peter Jarrett. Research assistance was provided by Patrizio Sicari

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