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The Warsaw Voice » Business » July 2, 2010
From the Business Editor
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Economy Picks Up Speed
July 2, 2010   
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The Polish economy has picked up speed and may expand by more than 3 percent this year, economists say.

Recent data shows that the Polish economy continues to do well in these tough times. According to the government’s Central Statistical Office (GUS), Poland’s GDP grew a healthy 3 percent in the first quarter in year-on-year terms. This means that the Polish economy is growing faster than the European Union economy as a whole, which expanded by just 0.5 percent in the same period, according to preliminary data by Eurostat, the EU’s statistics office.

Though Poland did well in the first quarter, it was outperformed by Slovakia whose economy grew by 4.5 percent, Eurostat said.

Data on industrial production in Poland is also optimistic. Manufacturing output grew by 14 percent in May compared with May last year, marking the seventh straight month with growing output. This trend was not even disturbed by the heavy floods that affected a large part of the country in May and June. Due to the flooding, Poland’s GDP growth in the second quarter could be lower than in the first three months of the year, experts say, but things should get better again in the following quarters as a result of business stimulated by massive cleanup after the flood. Another optimistic fact, economists say, is that the increased manufacturing output is mainly due to growing inventories and exports. Companies are restocking their inventories confident that economic trends will continue to improve in the second half of this year and next year. Growing exports, on the other hand, show that Polish products are competitive on international markets, experts say. They caution that the latest growth in exports may have also been due to a weakening of the zloty.

Meanwhile, a visible recovery in the German economy bodes well for what is happening in Poland, especially as over 50 percent of Poland’s exports to Germany are components for production. The latest economic acceleration in Germany offers opportunities for Polish companies to continue to increase their exports.

One of the effects of Poland’s upbeat economic performance is its progress in terms of per capita GDP. According to Eurostat data, Poland’s per capita GDP last year was 61 percent of the EU average, up from 48 percent 10 years ago. Poland outpaced two other new EU member countries, Latvia and Lithuania, in per capita GDP last year, while narrowing its gap with Estonia and Hungary. According to some experts, Poland could catch up with these two countries or even outdo them next year. On the other hand, Poland still has a long way to go to catch up with the poorest “old” member country, Portugal, whose per capita GDP is 78 percent of the EU average. If the Polish economy does not lose steam, this gap could be bridged in a decade or so, some experts say, though others predict it will take closer to 20 years.
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