Predicting the future
Experts from the Center for Social and Economic Research (CASE) have recently published a report presenting two possible paths of development for Poland for the next 10 years. Both scenarios stipulate that Poland will grow at a faster pace than the EU average and will benefit from favorable demographic conditions. However, the question is whether the growth will be high enough to ensure that Poland catches up with the Western European pack.
The dynamic scenario, called "almost Asian," predicts structural reforms, cutting social expenditure, and the continuation of privatization. The economy could grow by as much as 5.1 percent of GDP annually. The significant element stimulating the growth is the assumption of high absorption of EU subsidies and the increase of investments. In accordance with this scenario, in 2011 Poland could enter the eurozone. A partial liberalization of the service market in the EU could also constitute an additional positive impulse from 2012. As a result, by the end of 2016 the unemployment rate might have decreased to the level of 8.7 percent. "This scenario is not over-optimistic, it's possible," the co-author of the report, Rafał Antczak, said.
In the static "(South) America-like" scenario, the predicted pace of economic development would be slower, on average 3.8 percent annually. In this scenario privatization, deregulation and liberalization of the economy are not continued. "This is not the scenario of crisis but rather of floating, when no changes in the economic policy of the government will be made," Antczak explained.
According to CASE, such a policy would result in a smaller use of funds granted by the EU and would translate into a weaker incentive for investment demand. In this scenario the unemployment rate would decrease to the level of 12.3 percent over the next 10 years. Only 500,000 new work places would be formed in comparison to over 1.6 million in the dynamic scenario, and the euro would be adopted after 2016. The static scenario may not seem too pessimistic since, according to the authors, the forecast pace of economic growth in Poland will be almost twice as big as the average in the EU. The static scenario, however, will hinder the attainment of high, sustainable economic growth.
