No hurry with euro, says OECD
In its annual report on the Polish economy, the Paris-based Organization for Economic Cooperation and Development (OECD) says that while Poland's economy is clearly picking up after the EU accession, it still needs to address pressing issues as the high unemployment rate and excessive budget deficit.
"Poland's monetary and macroeconomic policies look good. However, the budget deficit remains high and the government needs to work on this issue. Unemployment and low labor-market flexibility are also an important problem," Andrew Dean, a deputy director of the country studies branch in the OECD's economics department, told a press conference.
According to the OECD there's room for the central bank to cut interest rates further, given the low inflation. "The National Bank of Poland has acquired a reputation for inflation aversion. It may no longer be so cautious and could afford to do more in the future to test the limits of available capacity," reads the report. "The forecasts in the April inflation report suggest that further easing would be unlikely to put price stability at risk."
Unlike recent reports from the International Monetary Fund, the OECD doesn't press Poland to adopt the euro as quickly as possible.
"It is very important for Poland to assess the costs and benefits of joining the eurozone. What's necessary is to ensure that your economy is flexible enough. That's why we're a little bit cautious about Poland's entering the euro area very quickly. It would not be wise to get in now," Dean said.
This seemed very much to the taste of the Minister of Economy, Piotr Woźniak, who stressed that while inflation is similar in all eurozone countries, the states that opted out - the UK, Denmark and Sweden - have lower unemployment rates and are recording faster GDP growth than eurozone members.
"The government's target is to make use of every possible growth leverage. We are not allergic to the euro, it's a great currency. The question is not if but when and the discussion is on," Woźniak said.
The OECD said that with the right policies in place Poland stood a good chance of meeting eurozone-entry criteria in the medium-term.
