GDP is set to grow 2.5% this year, with exports and productivity rising

The Polish economy grew by 1.9% in the first six months of this year, meaning GDP growth of only 1.5% in the second quarter, according to Economy Ministry estimates. The Ministry now expects growth of 2.5% this year. Such figures appear quite miserable compared to the robust growth of over 5%, which Poland enjoyed throughout the mid-1990s. However, the Economy Ministry does see a silver lining, claiming that the slowdown is a result of necessary restructuring in the economy, which has already yielded some positive results. The first of these is the increase in exports, primarily those to competitive EU markets, despite a strong zloty. For the first time, Poland has a trade surplus, of $361 million, with its major partner, Germany. The second is the increase in labor productivity, which reached 6.4% in the first half of the year. However, Economy Minister Janusz Steinhoff also named some unfavorable tendencies, such as rising unemployment and falling propensity to invest. The latter, he said, is a result of high interest rates, which he hopes will be lowered at the next meeting of the Monetary Policy Council, scheduled in four weeks'time. (Rzeczpospolita, July 28-29, p.B2) T.J.