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CONSULTING

POLAND



Area: 312,683 sq. km
Capital: Warsaw (pop. 1,690,821)
Population: 38,500,696 (July 2008 est.)
Annual growth rate: -0.045% (2008 est.)
Languages: Polish 97.8%
Literacy: 98%
Government type: Bicameral parliamentary democracy
Neighboring countries: Germany, Czech Republic, Slovakia, Ukraine, Belarus, Lithuania, Russia
Memberships: Australia Group, BIS, BSEC (observer), CBSS, CCC, CE, CEI, CERN, EAPC, EBRD, EU, FAO, IAEA, IBRD, ICAO, IFC, IHO, ILO, IMF, IMO, Interpol, IOC, NAM (guest), NATO, OECD, OSCE, PfP, UN, WCL, WEU (associate), WFTU, WHO, WIPO, WMO, WTO, WtoO, WtrO
Currency: zloty (PLN)

TARGET SECTORS

• White-goods
• Chemicals
• Electronics
• High-tech
• Machinery
• Food products
• BPO
• Timber
• Energy
• Logistics
• Metals and Metal products
• Tourism
• Construction
• Maritime
• Aviation
• Automotive

ECONOMY

GDP: $420 billion (2007)
Annual growth rate: 6.6% (2007)
GDP (PPP): $623.1 billion (2007 est.)
GDP per capita (PPP): $16,200 (2007 est.)
GDP - by composition: agriculture: 4.1%, industry: 31.6%, services: 64.4% (2007 est.)
Major industries: machine building, iron and steel, coal mining, shipbuilding, automobiles, furniture, textiles and apparel, chemicals, food processing, glass, beverages
Inflation: 4.8% (August 2008)
Unemployment: 9.3% (August 2008)
Labor force: 16.86 million (2007 est.); agriculture: 16.1%, industry: 29%, services: 54.9%
Trade (2007): Exports: $143.7 billion
Imports: $158.8 billion
Stock FDI: $143 billion (2007 est.)
Stock FDI abroad: $19.69 billion (2007 est.)

Poland has pursued a policy of economic liberalization since 1990 and today stands out as a success story among transition economies. In 2007, GDP grew an estimated 6.5%, based on rising private consumption, a jump in corporate investment, and EU funds inflows. GDP per capita is still much below the EU average, but is similar to that of the three Baltic states. Since 2004, EU membership and access to EU structural funds have provided a major boost to the economy. Unemployment is falling rapidly, though at roughly 12.8% in 2007, it remains well above the EU average. Tightening labor markets, and rising global energy and food prices, pose a risk to consumer price stability. In December 2007 inflation reached 4.1% on a year-over-year basis, or higher than the upper limit of the National Bank of Poland's target range. Poland's economic performance could improve further if the country addresses some of the remaining deficiencies in its business environment. An inefficient commercial court system, a rigid labor code, bureaucratic red tape, and persistent low-level corruption keep the private sector from performing up to its full potential. Rising demands to fund health care, education, and the state pension system present a challenge to the Polish government's effort to hold the consolidated public sector budget deficit under 3.0% of GDP, a target which was achieved in 2007. The PO/PSL coalition government which came to power in November 2007 plans to further reduce the budget deficit with the aim of eventually adopting the euro.
Economic growth is forecast to slow from an estimated 5.3% in 2008 to less than 4% per year in 2009-10 as external demand weakens and tighter monetary policy weighs on domestic demand.
Continuing rapid wage growth will mean that consumer price inflation will fall only slowly in 2009, although slower economic growth will allow inflation to fall more substantially in 2010.
The current-account deficit will continue to widen, expanding to 6.2% of GDP in 2009. Recovery in Western Europe will allow the deficit to narrow to 5.6% of GDP in 2010.

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