Despite the deep OECD-wide recession, the Polish economy continued to grow in 2009 due to several factors, including: monetary easing; exchange rate depreciation; relatively limited dependence on international trade; a sound banking sector and unleveraged private sector; tax cuts and other fiscal measures; and infrastructure investments linked to EU transfers and the 2012 football championship. Activity is projected to pick up, mainly driven by fixed investment, but to remain well below potential rates for some time. While headline inflation was, until recently, above the official target, it is expected to diminish steadily as economic slack increases. The general government deficit is projected to reach levels that are unprecedented since the beginning of the transition process, but no fiscal consolidation measures have been announced for 2010 by the authorities. The constitutional public debt limit of 60% of GDP is being dealt with mainly through an ambitious privatisation programme. This will nevertheless only delay the much needed consolidation of public finances until 2011. The monetary authorities should refrain from any interest-rate increases unless circumstances change.

Growth slowed in the second half of 2008 but was still positive in early 2009. Given the global downturn, activity is projected to contract in 2009, though the recession should be relatively shallow, notably due to relatively modest trade dependence, historically low interest rates, moderate indebtedness of the private sector, income tax cuts and the implementation of many infrastructure projects related to transfers of EU funds and the 2012 football championships.

The global economic crisis is affecting families and communities across the planet. With regions bearing the brunt of the crisis, affecting businesses, jobs and people generally, regional policies are very much part of the solution.

The pace of expansion decelerated moderately in the first half of 2008 and recent data point to a further weakening of activity. Amid the global slowdown, growth is projected to fall below potential, although income tax cuts should support private consumption. With declining oil prices and persisting, albeit abating, demand pressures in labour and product markets, core inflation is expected to subside more gradually than headline inflation.

Can cutting down on sugar subsidies lead to healthier trade competition and trimmer prices? The 2005 European Union market reforms aim to thin EU farmers’ sugar subsidies and cut out obsolete sugar mills. Sugar Policy Reform in the European Union and in World Sugar Markets maps out how this might work.

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.