Poland As A Europe´S Growth Leader

Introduction
According to the latest European Commission report presenting the economic situation and economic forecasts for all of the countries of the European Union for 2009 and the following years, Poland is the leader among all EU members in terms of maintaining positive levels of growth of gross domestic product. In the first quarter of 2009, the European Commission predicted a fall inPolish gross domestic product by 1.4% and public finance deficit at 6.6 percent. Nevertheless, the latest forecast shows that this year economy grows at 1.2% and the next year the economy will grow by 1.8%. Moderate acceleration in the economic growth can be expected in 2011 and will be 3,2%. The main factors which are responsible for such a scenario in Polish economy are: government anti-crisisplans, improving the situation in the global trade, relatively lenient conditions for conducting monetary policy and reducing tensions in the global capital markets. The resistance of the Polish economy to the global financial crisis is caused by a very good level of use of EU funds, the depreciation of polish currency and the very strong domestic consumption - Poland recorded the highest increasein September retail sales across the Community, which on an annual basis rose by 5.4%. However, Poland is not free from risks: unfavorable situation on the labor market and continuing problems with the growing deficit of public finances, which directly translates to dismiss the prospects of an early entry into the euro area.
Economic situation in the UE and Poland
The current recession hasproved to be the deepest and longest recession in the EU's history. GDP is set to fall by about 4% in 2009 for both the EU and the euro area. All economies are affected by the crisis where, among the large Member States, the 2009 contraction ranges from about 2% in France to 4½-5% in Germany, Italy and the United Kingdom. With real GDP growth projected at around 1,2%, Poland is expected to be the onlycountry in the EU with positive growth in 2009.

Source: http://ec.europa.eu/economy_finance/eu/forecasts/article16051_en.htm
Poland’s rapid growth over 2003-08 (5.1% on average over the period) did not give rise to any major macroeconomic imbalances, even if the economy started to face capacity utilization constraints by the end of the period. The economic boom facilitated the reduction ofthe government deficit to a relatively low level – below 2 % of GDP in 2007. These sound fundamentals have helped the Polish economy go through the global crisis better than other central and eastern European countries.
The resilience of the economy during the crisis also reflects a number of other factors. First, with a ratio of exports to GDP of about 40%, the Polish economy is relativelyclosed compared to other European countries, which limited the size of the demand shock related to the sharp fall in exports at the turn of the year (12% in the first half of 2009, year-on-year). Second, the depreciation of the currency (down 41% against the euro over the period August 2008-Fabruary 2009) is set to translate into a positive contribution of net exports in 2009. The depreciation of thecurrency has played a key role in supporting growth by improving the price competitiveness of Polish exports and limiting imports. Third, an investment-focused recovery plan and the inflow of EU funds have partly compensated the decline in investment, which was severely affected by the underutilization of production capacities and tighter credit conditions.
The recession has caused adeterioration in the European labour market, although a less dramatic one than initially expected. This is largely explained by the use of short-term policy measures, along with the impact of past labour-market reforms. Firms are, however, expected to reduce employment in the coming quarters and the unemployment rate is set to increase further, reaching 10,2% in the EU in 2011. In respect of unemployment,...