Poland Economy - 2006

Economy - overview:
Poland has steadfastly pursued a policy of economic liberalization throughout the 1990s and today stands out as a success story among transition economies. Even so, much remains to be done, especially in bringing down the unemployment rate - currently the highest in the EU. The privatization of small- and medium-sized state-owned companies and a liberal law on establishing new firms has encouraged the development of the private business sector, but legal and bureaucratic obstacles alongside persistent corruption are hampering its further development. Poland's agricultural sector remains handicapped by surplus labor, inefficient small farms, and lack of investment. Restructuring and privatization of "sensitive sectors" (e.g., coal, steel, railroads, and energy), while recently initiated, have stalled. Reforms in health care, education, the pension system, and state administration have resulted in larger-than-expected fiscal pressures. Further progress in public finance depends mainly on reducing losses in Polish state enterprises, restraining entitlements, and overhauling the tax code to incorporate the growing gray economy and farmers, most of whom pay no tax. The previous Socialist-led government introduced a package of social and administrative spending cuts to reduce public spending by about $17 billion through 2007, but full implementation of the plan was trumped by election-year politics in 2005. The right-wing Law and Justice party won parliamentary elections in September, and Lech KACZYNSKI won the presidential election in October 2005, running on a state-interventionist fiscal and monetary platform. Poland joined the EU in May 2004, and surging exports to the EU contributed to Poland's strong growth in 2004, though its competitiveness could be threatened by the zloty's appreciation. GDP per capita roughly equals that of the three Baltic states. Poland stands to benefit from nearly $23.2 billion in EU funds, available through 2006. Farmers have already begun to reap the rewards of membership via booming exports, higher food prices, and EU agricultural subsidies.

GDP (purchasing power parity):
$489.8 billion (2005 est.)

GDP (official exchange rate):
$242.7 billion (2005 est.)

GDP - real growth rate:
3.5% (2005 est.)

GDP - per capita (PPP):
$12,700 (2005 est.)

GDP - composition by sector:
agriculture: 2.8%
industry: 31.7%
services: 65.5% (2005 est.)

Labor force:
17.1 million (2005 est.)

Labor force - by occupation:
agriculture: 16.1%
industry: 29%
services: 54.9% (2002)

Unemployment rate:
18.3% (2005 est.)

Population below poverty line:
17% (2003 est.)

Household income or consumption by percentage share:
lowest 10%: 3.1%
highest 10%: 26.7% (2002)

Distribution of family income - Gini index:
34.1 (2002)

Inflation rate (consumer prices):
2.1% (2005 est.)

Investment (gross fixed):
18.5% of GDP (2005 est.)

Budget:
revenues: $52.73 billion
expenditures: $63.22 billion; including capital expenditures of $NA (2005 est.)

Public debt:
47.3% of GDP (2005 est.)

Agriculture - products:
potatoes, fruits, vegetables, wheat; poultry, eggs, pork, dairy

Industries:
machine building, iron and steel, coal mining, chemicals, shipbuilding, food processing, glass, beverages, textiles

Industrial production growth rate:
8.5% (2005 est.)

Electricity - production:
150.8 billion kWh (2004)

Electricity - consumption:
121.3 billion kWh (2004)

Electricity - exports:
15.2 billion kWh (2004)

Electricity - imports:
5 billion kWh (2004)

Oil - production:
24,530 bbl/day (2003 est.)

Oil - consumption:
476,200 bbl/day (2003 est.)

Oil - exports:
53,000 bbl/day (2001)

Oil - imports:
413,700 bbl/day (2001)

Oil - proved reserves:
142.4 million bbl (December 2004)

Natural gas - production:
4.33 billion cu m (2004)

Natural gas - consumption:
14.97 billion cu m (2003 est.)

Natural gas - exports:
44 million cu m (2004)

Natural gas - imports:
9.45 billion cu m (2004)

Natural gas - proved reserves:
154.4 billion cu m (December 2004)

Current account balance:
-$4.159 billion (2005 est.)

Exports:
$92.72 billion f.o.b. (2005 est.)

Exports - commodities:
machinery and transport equipment 37.8%, intermediate manufactured goods 23.7%, miscellaneous manufactured goods 17.1%, food and live animals 7.6% (2003)

Exports - partners:
Germany 30%, Italy 6.1%, France 6%, UK 5.4%, Czech Republic 4.3%, Netherlands 4.3% (2004)

Imports:
$95.67 billion f.o.b. (2005 est.)

Imports - commodities:
machinery and transport equipment 38%, intermediate manufactured goods 21%, chemicals 14.8%, minerals, fuels, lubricants, and related materials 9.1% (2003)

Imports - partners:
Germany 24.4%, Italy 7.9%, Russia 7.2%, France 6.7%, China 4.6% (2004)

Reserves of foreign exchange and gold:
$41.63 billion (2005 est.)

Debt - external:
$123.4 billion (30 June 2005 est.)

Economic aid - recipient:
$13.9 billion in available EU structural adjustment and cohesion funds (2004-06)

Currency (code):
zloty (PLN)

Exchange rates:
zlotych per US dollar - 3.2355 (2005), 3.6576 (2004), 3.8891 (2003), 4.08 (2002), 4.0939 (2001)
note: zlotych is the plural form of zloty