The Polish Economy is Booming

Central Statistical Office released the latest data reflecting the state of the Polish economy. Polish citizens have nothing to complain about. The country’s GDP growth rate in the third quarter of 2017 reached 4.9 percent. It is a substantial increase compared with the second quarter when the Polish economy was developing at the rate of 4 percent.

Taking into consideration the entire 2017 so far, GDP grew by 4.4 percent. According to the prognosis included in the budget act for 2017, the government expected the GDP to grow by 3.6 percent in 2017, so the latest statistical data was a positive surprise for most economic experts.

Another good news is statistics showing export and investment figures. Both of them are growing. Export figures look particularly good. Polish companies are transferring more goods and services abroad than they are importing. After a slow start at the beginning and middle of the year, investment figures are on the way up as well (even though still not as much as the Ministry of Finance would like to see).

Low unemployment (6.6 percent in October) and growing wages translate into growth in consumption. Private consumption increased by 4.8 percent in the third quarter. Higher consumer spending means higher budget revenue in the form of VAT tax. However, there is also a dark side to the booming consumer market. Inflation, which for years remained at a very low level, has recently spiked up to 2.5 percent. This trend is clearly visible in the food industry. Still, experts say inflation is not likely to exceed this level.

Even though the Polish economy is in very good condition at the moment, budget expenses still exceed budget revenue. Public debt is already over one billion PLN. Renowned economist and former president of the National Bank of Poland, Leszek Balcerowicz, harshly criticized the government and highlighted the fact that Polish national debt grows at a higher pace than in any other EU country. He said the recent reforms are harming the Polish economy.