The first half of 2007 saw an acceleration of economic activity, driven by booming domestic demand. Growing labour shortages have fuelled strong wage increases. The pick-up in unit labour costs and record-high capacity utilisation rates have darkened the inflation outlook. Persistent strength in domestic demand should support growth, but the current account deterioration is projected to continue.

“One of the most remarkable transitions in modern history,” is how Secretary-General Angel Gurría described Poland’s accomplishments since the end of the Cold War, in a special address at a conference celebrating 10 years of Polish membership of the OECD held in Warsaw on 23 November 2006.

Poland has just marked 10 years as a member of the OECD. It has made considerable progress, but more is needed to speed up convergence with the most advanced European economies.

After two years of slow growth and rising unemployment, GDP in Poland finally turned around in 2004 and is set to pick up to around 4.5% in 2006-07. According to the latest OECD Economic Survey of Poland (June 2006), the long process of convergence with EU partners may have resumed, though with GDP per head still under 45% of the EU average, there is much to be done.