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Poland - Country Profile

Poland has steadfastly pursued a policy of economic liberalization throughout the 1990s and today stands out as a success story among transition economies. Even so, much remains to be done, especially in bringing down unemployment. The privatization of small and medium-sized state-owned companies and a liberal law on establishing new firms has encouraged the development of the private business sector, but legal and bureaucratic obstacles alongside persistent corruption are hampering its further development. Poland's agricultural sector remains handicapped by surplus labor, inefficient small farms, and lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal, steel, railroads, and energy), while recently initiated, have stalled. Reforms in health care, education, the pension system, and state administration have resulted in larger-than-expected fiscal pressures. Further progress in public finance depends mainly on reducing losses in Polish state enterprises, restraining entitlements, and overhauling the tax code to incorporate the growing gray economy and farmers, most of whom pay no tax. The government has introduced a package of social and administrative spending cuts to reduce public spending by about $17 billion through 2007. Additional reductions are under discussion in the legislature but could be trumped by election-year politics in 2005. Poland joined the EU in May 2004, and surging exports to the EU contributed to Poland's strong growth in 2004, though its competitiveness could be threatened by the zloty's appreciation. GDP per capita roughly equals that of the three Baltic states. Poland stands to benefit from nearly $13.5 billion in EU funds, available through 2006. Farmers have already begun to reap the rewards of membership via higher food prices and EU agricultural subsidies.


Economic Statistics
Exports : $75.98 billion f.o.b. (2004 est.)
Export
Commodities :
machinery and transport equipment 37.8%, intermediate manufactured goods 23.7%, miscellaneous manufactured goods 17.1%, food and live animals 7.6% (2003)
Export
Partner
Germany 30%, Italy 6.1%, France 6%, UK 5.4%, Czech Republic 4.3%, Netherlands 4.3% (2004)
Imports $81.61 billion f.o.b. (2004 est.)
Import
Commodities :
machinery and transport equipment 38%, intermediate manufactured goods 21%, chemicals 14.8%, minerals, fuels, lubricants, and related materials 9.1% (2003)
Imports
Partners :
Germany 24.4%, Italy 7.9%, Russia 7.3%, France 6.7%, China 4.6% (2004)