Poland has aimed a policy of economic liberalization since 1990 and today stands out as a success story among transition economies. It is the only country in the European Union that avoided a recession and crisis through the 2008-09 economic downturn. Since 2004, EU membership and access to EU structural funds have provided a major stimulation to the economy. Inflation reached a low of about 2.6% in 2010 due to the global economic slowdown, but climbed to 4.3% in 2011. Weak revenues, together with rising demands to fund healthcare, education, and the state pension system caused the public sector budget deficit to rise to 7.8% of GDP in 2010, but the PO/PSL coalition government, which came to power in November 2007, took measures to shore up public finances – including increasing contributions to the public pension scheme at the expense of private pension funds – and reduced the deficit to 2.9% of GDP in 2011. Encouraging to hear that for the future years the coalition government has proposed further deficit-reducing reforms and to fulfill its promise to enact business-friendly reforms.
Doing business and Investing
After accession the European Union, Poland became part of the Single European Market, with the free movement of goods, services, people and capital. Moreover, Poland is one of the leaders in terms of economic development among EU countries. The main sector that promotes prosperity is: manufacturing, especially export oriented due to increasing competitiveness of Polish businesses. Private consumption each year is growing strongly too.
Poland’s EU membership creates new opportunities for investors planning to invest in the country. EU firms are able to conduct their activities under the same conditions as Polish businesses and, in addition, within the same, and therefore familiar, EU legal framework.
Poland’s natural comparative advantages are its market size and strategic geographic location. Investors from outside the EU can also benefit from Poland’s accession to the EU – by investing in Poland they get access not only to the Polish but to the EU market while taking advantage of lower production costs than in the other European Union countries.
Entrepreneurs in Poland can benefit from financial aid schemes, the establishment of 14 Special Economic Zones and the simple flat rate corporate taxation of 19%.