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Economy

Basic data
Territory: 312,685 km2
Population: 38.23m (2002 National Census)
Population growth: -0.06% (average, 2002-2006)
Land boundaries: Belarus, Czech Republic, Germany, Lithuania, Russia, Slovakia, Ukraine
Main Towns: Warsaw (capital), Lodz, Krakow, Wroclaw, Poznan, Katowice, Szczecin, Bydgoszcz, Lublin
Language: Polish
Measures: Metric system
Time: 1 hour ahead of GMT
Currency: Zloty (PLN)
Religions: Roman Catholic (95%), Eastern Orthodox, Protestant and other (5%);
Government ENGINE: Parliamentary democracy
President: Bronislaw Komorowski
Prime Minister: Donald Tusk
EU entry date: 1st May 2004
Public holidays: 1st January (New Year's Day); Easter Monday; 1st May (Labour Day); 3rd May (Polish National Day, Proclamation of 1791 Constitution); Corpus Christi; Assumption; 1st November (All Saints' Day); 11th November (Independence Day); 25th-26th December (Christmas) 

Key economic indicators and forecasts

Polish economy: GDP, quarterly trends
 
Q1/06
Q2/06
Q3/06
Q4/06
Q1/07
Q2/07
GDP real change, y-o-y
5.4%
6.3%
6.6%
6.6%
7.2%
6.4%
Source: Polish Market Review, November 2007
 
Polish economy: annual trends
 
 
2005
2006
latest 2007
2007f
2008f
GDP
 
 
 
 
 
 
 
GDP at current prices
€ bn
244.3
272.2
H1
142.2
-
-
Real GDP change
y-o-y
3.6%
6.2%
H1
6.8%
6.4%
5.4%
Foreign Trade
 
 
 
 
 
 
 
Exports
€ bn
71.4
87.9
Jan-Aug
64.3
99.9
111.0
Imports
€ bn
81.2
100.8
Jan-Aug
74.4
117.2
134.3
Balance
€ bn
-9.8
-12.9
Jan-Aug
-10.1
-17.3
-23.3
Prices
 
 
 
 
 
 
 
CPI
y-o-y
2.1%
1.0%
Jan-Sep
2.1%
2.3%
3.1%
PPI
y-o-y
0.7%
2.3%
Jan-Sep
2.3%
2.8%
3.2%
Unemployment (registered)      
e-o-p
17.6%
14.8%
Sep
11.6%
11.4%
9.5%
Exchange rates 
 
 
 
 
 
 
 
EUR/PLN
e-o-p
3.86
3.83
Sep
3.78
3.72
3.67
USD/PLN
e-o-p
3.26
2.91
Sep
2.66
2.67
2.74
Market size
 
 
 
 
 
 
 
Population
m
38.157
38.125
Aug
38.124
-
-
Per capita GDP at current prices
6,402
7,139
H1
3,731
-
-
f – forecast
Source: Polish Market Review, November 2007

Latest economic briefing


  • Economic growth
The strong economic upturn observed in 2006 continued in the first half of this year. Gross domestic product expanded by 6.8% in H1 2007 compared to the same period last year, driven by rapid growth in domestic demand, including both consumption and capital investment. We expect the high level of economic activity to be maintained in the second part of the year, although GDP growth should not exceed 6% y-o-y.
  • Foreign trade
After a bumper 2006, increases in foreign trade turnover were less spectacular in the first half of this year. The value of Polish exports grew by 13.5% (in current prices) in H1 2007 compared to a year ago, while imports increased by 16.6% y-o-y. As a result, the foreign trade deficit topped €7.6bn for the period, i.e. an almost 40% increase on a year ago. We expect the favourable foreign-trade conditions to continue through the remainder of the year. We forecast exports to expand by 13.7% in 2007 and imports by 16.3%.
  • Current account
The widening foreign trade deficit is one of the major factors behind a growing current account imbalance. In H1 2007, the current account deficit totalled €5.7bn, i.e. up by more than two-fifths on the same period last year. We expect this trend to continue in the coming quarters. However, the current account deficit for the year should remain at a moderate level, coming in at not more than 4% of GDP.
  • Output
Encouraged by rapidly rising demand, companies are expanding their operations. Industrial output grew by 10.7% y-o-y in the first half of the year, only marginally lower than in 2006. Even faster growth was recorded in the construction-assembly output, which jumped by 30.2% y-o-y on the back of a sharp upturn in capital investment and a booming housing market. We should expect only slightly slower growth in output in the second half of the year.
  • Unemployment
The acceleration in the economy has transformed the labour market. The average monthly employment increased by 3.2% y-o-y in the first half of the year, and the registered unemployment rate dropped from 15.1% to 12.3%. We expect this positive trend to continue in the second half of the year. According to our forecasts, the registered unemployment rate at year-end will be 11.4%.
  • Wages
The recent surge in demand for workers coupled with the massive scale of labour migration to EU countries has led to shortages of skilled workers in many sectors. As a result, wage pressures increased significantly. The average gross monthly wage jumped by 8% in H1 2007 compared to a year ago. We should expect further acceleration in wage growth in the second half of the year, to around 10% y-o-y.
  • Inflation
After staying at very low levels throughout 2006, the CPI remained moderate in the first half of this year. Despite the strong growth in domestic demand and faster wage growth, consumer prices increased by only 2.2% y-o-y in H1 2007. Although the fourth quarter should bring higher CPI levels, inflation for the year should remain broadly within the central bank’s target of 2.5% y-o-y.
 

Basic data on Polish regions


 
Region
Geographic and demographic data
(2006)
Economic data
(2005)
Area (km2)
Population
('000)
Population density (persons per
1 km2)
GDP
(PLN m)
Share of GDP (Poland=100%)
GDP per capita (PLN)
GDP per capita (Poland=100%)
Poland
312,679
38,125
122
983,302
100.0%
25,767
100.0%
Dolnoslaskie
19,947
2,882
145
76,943
7.8%
26,620
103.3%
Kujawsko-Pomorskie
17,972
2,066
115
46,469
4.7%
22,474
87.2%
Lubelskie
25,122
2,173
86
38,388
3.9%
17,591
68.3%
Lubuskie
13,988
1,009
72
23,455
2.4%
23,241
90.2%
Lodzkie
18,219
2,566
141
61,110
6.2%
23,666
91.8%
Malopolskie
15,183
3,271
215
71,748
7.3%
21,989
85.3%
Mazowieckie
35,558
5,172
145
210,219
21.4%
40,817
158.4%
Opolskie
9,412
1,042
111
22,405
2.3%
21,347
82.8%
Podkarpackie
17,845
2,098
118
37,319
3.8%
17,789
69.0%
Podlaskie
20,187
1,196
59
22,909
2.3%
19,075
74.0%
Pomorskie
18,310
2,204
120
55,602
5.7%
25,308
98.2%
Slaskie
12,334
4,669
379
130,442
13.3%
27,792
107.9%
Swietokrzyskie
11,710
1,280
109
24,794
2.5%
19,274
74.8%
Warminsko-Mazurskie
24,173
1,427
59
28,153
2.9%
19,709
76.5%
Wielkopolskie
29,827
3,379
113
92,813
9.4%
27,553
106.9%
Zachodniopomorskie
22,892
1,693
74
40,533
4.1%
23,924
92.8%
Source: “Construction sector in Poland – H2 2007”, PMR Publications, October 2007
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NordicHouse in Krakow is a consulting company, which was created with the purpose of initiating and developing the interregional cooperation between the Nordic countries and the Southern Poland through promotion of contacts for business, tourism and culture.
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