POLAND

The 9th largest country in Europe and 69th in the world in terms of size; a nation with a proud cultural heritage Total area: 312,685 sq km Population:  39 million Government type: Parliamentary democracy Administrative division: 16 administrative regions (“voivodships”) Capital + other major cities: Warsaw (1.6 million) + Lodz (784,000), Krakow (734,000) Currency: zloty (PLN) Languages: Polish Ethnicity: Polish 96.7%, German 0.4%, Belarusian 0.1%, Ukrainian 0.1%, other & unspecified 2.7% Religion: Roman Catholic (95%), Eastern Orthodox, Protestant, and other (5%) President: (Mr.) Bronislaw Komorowski (since August 2010) Prime Minister: (Mr.) Donald Tusk (since November 2007) Date of EU accession: 1 May 2004

MACROECONOMIC OVERVIEW

Poland stands out as one of the most successful and open transition economies in the CEE region. Privatization of small and medium-size firms in early 1990's and liberal law on establishing new firms led to rapid development of a private sector now accounting for 70% of all economic activity.

Poland has been enjoying the longest period of uninterrupted GDP growth in Europe (last recession taking place in 1991). And its GDP kept growing, even in 2009, while the rest of Europe, without exceptions, went down!

Poland was the least hit by the recent global financial crisis, thanks to its large domestic market as well as sound fundamentals at the onset of the crisis: a well-capitalized and sound financial sector, relatively low degree of openness of the economy, and sizeable depreciation of the Polish currency at an early stage of the economic turmoil.

Inflation, at three digits in 1990, fell to double digits in 1991-1998, and declined steadily to reach as low as 0.8 % in 2003. In 2008, inflation reached 4.2 %, and slower economic growth and changes in labour market conditions brought the inflation to 4.0% in 2009 and 2.7% in 2010.

The unemployment rate reached its peak in 2000, mainly as a result of industrial restructuring aimed at increasing productivity and competitiveness. Since then, the situation has improved. Although the rate started to climb slowly again in 2008, it managed to stay in single digits.

Source: Eurostat, 2012; *2012 - forecast

STRUCTURE OF ECONOMY

The structure of Polish economy has changed dramatically over the last 15 years. The service sector has gained in importance (generating 63% of the GDP in 2011), and the significance of industry diminished. The changes resulted from a dynamic development of the service sector and profound restructuring of ineffective national industrial companies in Poland in the 1990s. This process was accompanied by the development of modern industrial sectors, which was feasible mainly thanks to strong inflow of foreign investment. Following a temporary economic crisis of 1999-2003, the Polish industry witnessed one of the most dynamic growth rates among the EU member countries.

The Polish industry includes over 380,000 business entities of which over 90% are privately owned. The majority of industrial businesses were in processing (98.5%), within which the primary group was metal processing companies (over 52,000). Other strong groups included clothing and fur industry, furniture, and wood processing sectors.