The government needs a game plan

A jump in consumption and investments, by up to 10 percent, will fuel economic growth in 2006, according to the Polish Confederation of Private Employers (PKPP) Lewiatan. The organization estimates that GDP growth will hit 4.6 percent this year, in comparison to an estimated 3.4 percent in 2005.

Exports are also expected to grow, but aren't expected to affect GDP growth as much as in recent years, due to an expected increase in imports stimulated by growing domestic demand.

PKPP also expects the situation on the labor market to improve this year. Unemployment is expected to fall further and reach 16.7 percent by the end of 2006. "We expect around 150,000 new jobs to be created," said the director of PKPP's expert department, Małgorzata Krzysztoszek. Average wages will also grow, but only in certain sectors. "[Wages] will grow particularly for high-skilled jobs, especially in areas experiencing a shortage of labor," Krzysztoszek says.

The confederation sees the budget deficit as a potential problem, but it is optimistic that budget-deficit predictions for 2006 will be realized. However, PKPP is not yet optimistic enough to predict that the current growth will be a long-term trend. It criticized the government's reluctance to introduce bold steps supporting the development of enterprises, and claims that the growth is mainly due to the economy's independence from politics and the level of privatization. PKPP says it is impossible to say how long this growth tendency will last without incentives and help from the government. "I don't see a breakthrough in the government's economic policy, which would help to get the economy out of the quagmire," says the director of the Gdańsk Institute for Market Economics (IBNGR), Bohdan Wyżnikiewicz.

The chief economist at BRE Bank, Janusz Jankowiak, claims that entering the eurozone would boost economic growth: "At the end of 2005 Poland met all the convergence criteria. Adopting the euro would have the same effect on the economy as cutting the central bank's interest rates. But there is no desire on the government's side to do so."