Investment boom

This year will see a considerable growth in investment, according to a recent report on the macroeconomic situation in Poland produced by the Gdańsk Institute for Market Economics (IBnGR).

In Q2, investment grew 10.8 percent. "Investment has kicked off after a sluggish year; we have a double-digit figure for the first time since 1998," says Marcin Peterlik. IBnGR's forecast for the whole year stands at 11.2 percent, which is a substantial rise compared to just 6.5 percent last year.

"In our opinion economic growth is higher than it is commonly thought and in Q2 gross national product grew 5.5 percent," says Dr Bogdan Wyżnikiewicz. Unemployment fell by 1.8 percent on last year, reaching 16 percent in H1 2006. Wyżnikiewicz stresses that this is not just because more Poles are working abroad, but some new jobs were created and employment rose 2.3 percent.

Economic growth, however, has not led to an increase in prices and inflation in Poland continues to be the lowest in the EU. In Q2, it stood at 0.8 percent, but is likely to go up. IBnGR forecasts that inflation will rise from 0.9 percent this year to 2.2 percent in 2007. Marcin Peterlik points to the rising price of oil and a record hot summer. "The drought will lead to a rise in the price of some grocery products, which will impact the overall growth of prices," he says.

Wyżnikiewicz stresses that the economic situation in Poland has been continuously improving, but other emerging markets and states that joined the EU together with Poland, for example Lithuania and Latvia, are showing higher economic growth.