Poland’s economy
10.03.2010
productivity catch-up
The first, and most important, fundamental is the process of productivity catch-up. The current real productivity/average labour cost ratio in Poland creates a significant comparative advantage for the country as a location for production activities. The favourable labour-productivity ratio is even more evident in the case of newly constructed factories and service centres.
human capital
The second fundamental is the country’s human capital. The share of young people in Poland’s total population is considerably higher than in Western Europe, and the mortality rate is lower. Moreover, Poland has a large pool of highly skilled workers and one of the highest percentages of students in tertiary education in Europe.
currency
The third fundamental is currency. After many years of stabilisation efforts undertaken by an independent central bank, the country now enjoys inflation of less than 4%. Since productivity growth is much more robust than among Poland’s major trading partners, the currency has been under real appreciation pressure over the last few years. In addition and due to the growing credibility and prospects of Euro adoption, interest rates have converged to a level not much higher than in Western Europe.
EU membership
Finally, the fourth fundamental is EU membership. The greatest benefit of entry to the EU has been the wide range of business opportunities. The European market is now fully open to Polish products while, at the same time, investors are moving into the country. The upgrade of the legal and regulatory system, required for entry, has helped enhance the country’s image. Last but not least, the significant EU development funds available under the 7-year EU financial plan will help to resolve the problem of Poland’s outdated infrastructure.
the article from Doing Business - publication prepared by: PriceWaterhouseCoopers in the cooperation with MARR