…Only this last scenario will guarantee the fulfillment of the Government's economic policy objectives, and the strategy is committed to achieving it. The Government believes that the fundamental condition for achieving the objectives outlined in the strategy is a change in attitude from the Monetary Policy Council, which must abandon its restrictive policy and support the Government's economic policy. The achievement of the economic policy objectives rests on three pillars:
– public finance strategy,
– economic growth strategy,
– strategy of integration with the EU.
Public finance strategy would serve as a "protective anchor" against misguided economic decisions made by irresponsible politicians driven by self-interest. Economic growth depends primarily on the growth of investment.
The guidelines for economic development
According to forecasts from the National Statistical Office and the Polish Academy of Sciences, the most optimistic scenario for the Polish economy in the coming years projects GDP growth, a decline in inflation to 4 percent, and an unemployment rate of around 15 percent. This optimistic scenario is only possible if public finances and other reforms are implemented to eliminate structural weaknesses in the economy and significantly increase investment. Institutional regulations and measures to facilitate economic activity are also necessary. Only then can GDP growth be expected, initially at 4 percent, and then, in 2004, when Poland joins the EU, at 5 percent. After 2006, a high rate of growth in individual consumption (above 5 percent) is expected. Inflation and the public finance deficit will remain at a relatively high level until 2003; thereafter, they will gradually decline. Of key importance to the development strategy is finding adequate domestic sources of financing and reducing the public finance deficit.
Preparation of the general budgets at the end of December 2001
Poland's budget deficit widened in 2001 to 32.580 billion zlotys (98,8 percent of the initial forecast), the Finance Ministry reported on January 22. Budget revenues reached 140.300 billion zlotys (92,0 percent of the planned amount). Indirect taxes accounted for approximately 82.369,1 billion zlotys (94,7 percent of the planned amount), while corporate income tax brought in approximately 13.272,3 billion zlotys (80,6 percent of the planned amount) and personal income tax 23.386,2 billion zlotys (91,3 percent of the planned amount).
Budgetary expenditures in 2001 totaled approximately 172.880 billion zlotys (93,2 percent of the planned amount). Approximately 17.104,7 billion zlotys were spent on servicing the domestic debt (98,1 percent of the planned amount), and approximately 3.793,8 billion zlotys were spent on servicing the external debt (87,9 percent of the planned amount).
On February 15, the Diet approved the General State Budget for 2002 (revenue: 145.100 billion zlotys, expenditure: 185.100 billion zlotys, deficit: 40 billion). The budget law will now be sent to the Senate, which will debate it in March.
Unemployment is rising
The unemployment rate rose from 16,8 percent in November to 17,4 percent in December 2001, the National Bureau of Statistics reported on January 22.
In December 2001, there were 3.115.100 unemployed people in Poland. According to the budget law, the unemployment rate at the end of 2001 was projected to be 17,3%, and in December 2002, 18,6%.
The regions that suffered the greatest increase in unemployment were Greater Poland (22,7%), Silesia (20,6%) and Masovia and Pomerania (19,4% in each), while those that increased the least were the subcarpathian (7,1%) and Podlasie (9,1%).
In 2001, approximately 2.476.400 people registered at employment offices for the first time (500 more than the previous year). The number of young people among the new registrants decreased (from 16,0% in 2000 to 14,8%).
Poland and Hungary, stable countries
Poland and Hungary are among the most stable emerging markets, according to The Economist, based on a Lehman Brothers report. The report's authors assessed a number of countries on a 100-point scale that considered political risk and economic factors. A higher score indicates a more stable economy. In February 2002, Poland scored just over 70 points, and Hungary 75.
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