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The Warsaw Voice » Business » April 8, 2009
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A Step Ahead
April 8, 2009 By Andrzej Ratajczyk   
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While the global crisis has dampened strong growth, the Polish economy will be the only one in Europe to expand this year and the sixth fastest growing economy in the world, according to one forecast. Other projections are less optimistic, but still place Poland ahead of the pack.

Poland is one of the few economies in the world that are expected to grow this year. As a result, it is increasingly appealing to foreign investors.

China will be the world's fastest growing economy, with 6-percent GDP growth this year, according to an analysis by the Economist Intelligence Unit (EIU) published in The Economist weekly at the beginning of April. India is expected to be the runner-up, with 5 percent, and Egypt is expected to be in third place, with 3.9 percent. Poland ranks sixth in this league table, with a predicted growth rate of 0.7 percent.

According to the EIU, Poland will be the only European economy to expand this year. In 2010, Poland's economic growth is expected to accelerate to 2.2 percent.

Other international institutions have also rated Poland's prospects as better than those of others in the region. According to the Fitch Ratings agency, which published a report on the prospects of emerging economies in Europe in early April, Hungary and Kazakhstan are the most vulnerable to the global crisis, while Poland and Turkey will be the least affected in the region.

Fitch predicts that Poland's GDP will grow by 0 percent this year, compared with a 3.1-percent contraction in the region as a whole. In 2010, the Polish economy is expected to expand by 1.5 percent, while the whole region is forecast to grow by 1.4 percent. Although the projection is relatively optimistic for Poland, Fitch revised downward its figure for the country-from 1.5 percent in late January and 1.2 percent in early February.

The expected 3.1-percent GDP contraction in Europe's emerging economies in 2009 means a deep recession, considering that the region's GDP grew by 4 percent in 2008, according to preliminary data, and by 6.8 percent on average in each of the five years from 2003 to 2007. Fitch predicts that the contraction in Central and Eastern Europe will be sharper than elsewhere because many countries in the region are particularly vulnerable to shocks associated with the global crisis. This is due to their open markets, macroeconomic imbalances, and heavy dependence on imported raw materials, Fitch says.

According to Fitch, the world's developed economies are dealing with the worst "synchronized recession" since World War II. In its report, the agency notes that GDP growth in the four largest economies of the region-Russia, Turkey, Poland, and the Czech Republic-will be above the median growth rate and will positively influence the average growth rate for "emerging Europe" as a whole.

The World Bank has revised downward its growth projection for Poland to 0.5 percent. The bank now projects that the global economy will contract by 1.7 percent this year, compared with 1.9 percent growth in 2008, and that it will grow by 2.3 percent next year. In its EU10 Regular Economic Report published in late February, the bank predicted that Poland's 2009 GDP would grow 2 percent. In November last year, the bank had forecast the Polish economy to grow 4 percent in 2009 and 4.7 percent in 2010. Now, its projection for Poland next year has been revised downward to 2.8 percent.

At a recent conference organized by the Polish Association of Stock Exchange Issuers, Waldemar Pawlak, the deputy prime minister and economy minister, said, "Poland is in a better position than other European countries, so we can overcome the crisis faster."

In a survey of Poland's foreign companies by the Polish-German Chamber of Industry and Commerce, 82 percent of those polled said they are glad they have decided to invest in this country. Only 8 percent said they are dissatisfied. Although the respondents admitted that Poland is not immune to the crisis, they said they are happy they have invested in Poland instead of Latvia or Ukraine, both of which are struggling with major economic problems.

For the first time, those surveyed by the chamber called Poland the most attractive country in the world. They said they appreciate the fact that Poland is a member of the European Union, and that it has a qualified labor force, strong domestic demand, and a stable economy. Although the economy is slowing, it will not slide into a recession, respondents said.

Another advantage is Poland's well-educated managers, who outdistance their counterparts in other Central and Eastern European countries. Polish managers are increasingly seen as Poland's main advantage as the country strives to attract foreign investment, according to a report by Target, a company specializing in human resources consulting. The report, prepared together with the Henley Business School in London, describes Polish managers as the most enterprising, dynamic, hard-working and displaying the best approach to the customer, compared with their colleagues in neighboring countries. The aim of the survey, which was conducted in Bulgaria, the Czech Republic, Poland, Romania, Slovakia and Hungary, was to determine whether Central and Eastern European managers can compete with their Western counterparts.

Poland's corporate sector is considered to be the least corrupt in the region, Target says. "In many cases, foreign specialists we have found are happy with their work with Polish people and see no major difference between Polish managers and managers in their home countries," said Sylwia Rzemieniewska, managing director at Target Poland. "Today, Polish managerial staff have a good reputation across Europe. This is definitely one of the arguments investors take into account when making decisions about where to set up their business."
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