Sunday, March 04, 2007

Poland’s economic growth is cause of concern

“Concerns over pace of growth in Poland” -
“Economic growth surprises analysts” -
“The Soaring Eagle: Poland’s Economic performance and challenges” -

At the end of last year, Poland, once referred to as the “soaring eagle of Europe” regarding its economy, experienced accelerated growth of 6.4%--while polish businesses rejoiced in such strong growth, experts warned that it is unsustainable; the chief economist for the Polish Business Roundtable has said “[Poland] is an economy driving with the warning lights on.”

For the entirety of 2006, exports grew by 22.6%, imports by 23% and overall GDP growth was 5.8%. As a particular example, one of Poland’s meat producers more than doubled their profits last year. The primary problem with such sudden and drastic growth is the resulting labour shortages—there is a limited pool of new workers to service the demands of the market. This lack of workers is a result of hundreds of thousands having migrated to western Europe, while a lot of workers who remain are older and untrained. Recent statistics suggest that 52% of Polish companies have problems finding workers.

The pace of Poland’s economic growth came as a surprise to analysts at the end of 2006, despite that fact that, since the country joined the OECD (Organization for Economic Cooperation and Development), it has, on average, had over 4% GDP growth per annum, against the OECD member’s overall average of barely over 2%. Additionally, income per capita in the country rose from below 40% of the OECD average in the 1990s to nearly 50% today.

- will filling the need for more workers allow Poland to sustain such growth indefinitely?

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