OECD Economic Surveys: Poland

Every 18 months
1999-060X (online)
1995-3542 (print)
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OECD’s periodic surveys of the Polish economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

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OECD Economic Surveys: Poland 2012

OECD Economic Surveys: Poland 2012

Volume 2012 Issue 7 You do not have access to this content

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28 Mar 2012
9789264127296 (PDF) ;9789264127289(print)

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OECD's 2012 Economic Survey of Poland examines recent economic developments, policies, and prospects. It also includes special chapters covering climate change and health care.
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  • Basic statistics of Poland, 2010
  • Executive summary
    Poland has been the best growth performer within the OECD through the global economic crisis. However, with its planned fiscal retrenchment and the European economy grinding to a halt, real GDP growth is projected to slow to 2¾-3 per cent in 2012 and 2013. That should be sufficient to ease inflation pressures, implying that the current somewhat accommodative monetary policy stance is appropriate, even though inflation risks are currently tilted to the upside. Yet, Poland is not immune to contagion risks from its European trading partners. Despite sound prudential regulation and a comparatively solid financial system, the banks’ large foreign-currency liabilities and the reliance on potentially volatile portfolio inflows represent potential sources of instability in the event of a deeper liquidity crisis. Under a scenario of a sharper-than-projected slowdown, Poland would have policy space to cushion the shock by easing monetary conditions, provided that the zloty does not weaken substantially. On the other hand, automatic fiscal stabilisers should be allowed to work within the constraints imposed by the constitutional debt rule.
  • Assessment and recommendations
    Since2007, Poland has been the best economic performer within the OECD as measured by real GDP growth (Figure 1). As a result, Poland has caught up on average 2 percentage points of its GDP-per-capita gap with the EU15 annually since 2005, more than double the rate achieved in the first half of the 2000s. This strong performance can be explained by substantial inflows of EU funds (which have contributed to modernising transport infrastructure), stimulus from domestic macroeconomic policies (through 2010), exchangerate depreciation and effective prudential regulation of the comparatively solid financial system. In contrast, despite improved business-sector profitability, private capital outlays were weak until 2010 (Figure 2). In 2011, real GDP, mainly driven by private consumption and public investment, especially in the construction sector, is estimated to have grown by 4.3%, exceeding OECD estimates of potential growth of about 3-3.5%. However, the sustainability of high growth is open to question, unless a broad range of reforms are undertaken to deal with underlying imbalances and to overcome structural weaknesses. With the government having received its second electoral mandate, now is the time to formulate and implement a reform programme that will promote continued rapid catch-up and solidify the confidence of financial markets in Poland’s economic future.
  • Improving the health-care system
    Since the transformation following the Communist era, Poland has matched improvements in health outcomes of the most developed OECD countries, although without catching up the ground lost during the 1970s and 1980s. The health status of the population remains relatively poor, although after controlling for per capita income health outcomes are only slightly below the OECD average. The Polish health-care system is characterised by low spending, a heavily regulated public system with a stringent budget constraint, restricted sub-national government autonomy and a thin private insurance market. Heavy out-of-pocket payments and long waiting lists generate inequalities in access to care. The most pressing issues to be addressed concern: easing the substantial limitations in access to care; reducing persistent inequalities; carefully designing new private health insurance; better coordinating among major public actors; improving hospital management; strengthening the gate-keeping function played by generalists; and developing a comprehensive long-term-care strategy.
  • Climate change policies in Poland - minimising abatement costs
    Poland is on track to meet its international greenhouse-gas emissions commitments. However, it will need to cut emissions significantly in the future, if the European Commission’s proposal on the Low Carbon Roadmap is adopted. Policies should ensure that the country’s substantial reduction potential, mainly linked to the energy sector’s high emissions intensity, and implying overall abatement costs above the EU-average, is realised in a least-cost fashion by imposing an economywide single carbon price. This stands in contrast with current explicit and implicit carbon prices, which vary widely across different sectors of the economy. Crucial to least-cost abatement is also a high responsiveness to the EU-ETS carbon price signal. While Poland has made good progress in complying with EU regulations related to the energy sector, the large share of public ownership and the lack of effective separation between electricity producers and distributors may blur the price signal for investment decisions in generation capacity. The isolation of the Polish electricity market implies a need for more investment in low-emission technologies in Poland to achieve a given emissions-reduction target, whereas a deeper integration with neighbouring electricity markets would spread the burden more efficiently across countries. The cost-efficiency advantage of uniform support to renewables via green certificates should be retained to minimise abatement costs. Government policies aimed at a higher share of nuclear power and natural gas from shale formations need to take fully into account tail risks and the short- and longterm environmental costs of the use of the former and fully consider environmental risks related to extraction of the latter. Energy efficiency policies can help to address market failure but should not be allowed to distort relative carbon prices.
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