Positive predictions for the Polish economy

Moody's has speculated that growth rates in Poland could be pushed into the range of five to seven percent, if inflows of structural funds are matched accordingly by sub-national government levels.

Poland is set to be the biggest recipient of EU funds during the period 2007-2013, giving the country a great opportunity for boosting economic activity, if the rate of absorption is at a corresponding level. The Moody's report suggests that a sufficient rate of absorption could be achieved in the future, particularly if the government were to appoint economic and legal coordinators to monitor the situation.

Vice president of Moody's, Jonathan Schiffer, highlighted some possible hindrances to the economy as a result of Law and Justice's policies towards former communists in business and their restraint on the National Bank of Poland's (NBP) independence. In January 2008, new legislation will be introduced, placing further constraints upon the NBP, as the various financial supervision bodies will merge into one new institution under governmental control and influence.

Predictions for the government coalition are not particularly bright, with expectations that old conflicts will sour the reunion.

The report places Poland on a par with Latvia and Lithuania, on account of its relatively lower external vulnerability. Poland's debt ceiling, which is a public debt/GDP ratio of 50-60 percent, places it in a comfortable position to meet any future debt payments on time.

Victoria Baghdjian