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SUMMARY
During the 1990s, the Polish economy has attained a satisfactory level of maturity. The high growth recorded in recent years – fast rise in labour productivity and in gross fixed investment – has strengthened the economy. The financial position of banks, the business sector and the state is good. The private sector grows dynamically, the privatization process is well advanced and the inflow of foreign direct investment has been accelerating; foreign debt is no longer a problem.
The economic policy, preoccupied with inflation and insisting on high interest rates, real appreciation of the Polish zloty and low budget deficits, may be the major threat to the stability of the economy. Undue appreciation may, in the short and medium term, cause unmanageable trade and current account deficits, while high interest rates may slow down overall growth and enhance the risks connected with high inflows of short-term capital. Provided the policy is not excessively restrictive, Poland will be able to sustain stable and high growth.
In the medium run (until about the year 2001) real GDP growth, of about 6.5% p.a., will be driven primarily by expanding gross fixed investment and rising labour productivity. Domestic saving will, during that period, fall short of domestic investment. There will be a high inflow of foreign direct investment and an increasing foreign trade deficit. The weight of foreign debt will yet be progressively reduced.
In the longer run (until about the year 2007) the investment rate will stabilize. Further high growth in real GDP will be supported by rising net exports. By about 2007 domestic saving may catch up with domestic investment, and the share of foreign debt in the GDP may, assuming no revolving of the old debts, fall to a low level.
Per capita GDP, standing at about USD 6,400 in 1997 (at PPP), will rise
to about
WIIW Analytical Forecast, L. Podkaminer: POLAND: Medium- and
Long-term Economic Prospects, April 1998, 33 pp. including 1 Figure
and 14 Tables,
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