Taking the long view

The Gdańsk Institute for Market Economics (IBnGR) says Poland's robust economic growth will continue in 2007 and 2008. If the current government maintains discipline in public finances, speeds up privatization and increases the effectiveness of the absorption of EU funds, growth could reach 5.3 percent this year. However, the group says this could drop slightly to below five percent in 2008.

"The reason for [the predicted drop] is that not enough investments have been made in the Polish economy so that it could gain significant increases in production. There are also other factors. Reforms are being delayed and there is no economic strategy. Leaving the economy aside results in short-term growth, but things need to improve in order to keep the situation positive in the long-term perspective," says Bohdan Wyżnikiewicz, deputy president of IBnGR.

According to IBnGR, the construction industry will note the highest growth of any sector, reaching 14.5 percent this year, and around nine percent in 2008.

The influence of domestic demand will have a bigger impact on the economy. Its growth will amount to some 6.3 this year and 6.2 percent in 2008. Investments will increase by some 17 percent and consumption by 3.5 to four percent over the next few years. Inflation will probably be closer to the inflation target and come in at 2.5 percent at the end of this year and 2.7 percent at the end of 2008.

The Institute sees unemployment, which fell faster than expected, as a barometer of the economic situation. IBnGR says the unemployment rate will drop to 12.9 percent at the end of 2008.