Poland: From Crisis Resilience to Robust Growth
differential will be lower than prior to the crisis. From 1993 to 2008, Poland grew faster than the EU15 in every single year with the exception of 2001. And with exception of the Asian crisis in the early 2000s, Poland’s growth differential with the EU15 was at least 1.5 percent of GDP (figure 10.16). For example, econometric estimates suggest that the economic integration in the EU provided a growth dividend to EU10 countries of around 1.7 percentage points, over and above the direct effects of higher capital and trade flows (EC 2009c). Going forward, higher growth in Poland than in the EU15 reflects capital inflows attracted by higher returns on investment compared with the EU15 due to capital scarcity and competitive labor costs, EU funds, and privatization; rising labor participation; the upgrading of skill levels; and rising TFP. While it is difficult to estimate the precise impact, reforms in these areas, anchored in the goal of euro adoption, will be crucial for shoring up long-term growth prospects and transforming the economy in line with the government’s Vision 2030 (box 10.5). Most growth-oriented reforms are designed to foster the microeconomics of creation and destruction, aid structural change and innovation, and protect people who are adversely affected by these dynamics. Such structural reforms are also endorsed in the EU’s Europe 2020 strategy. Based on the EC’s macroeconomic model QUEST III, the main priority areas of this
Figure 10.16 Poland and EU15 Growth Differential
94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09
19
19
93
percent
8 7 6 5 4 3 2 1 0 –1 –2 –3 –4 –5
EU15 Source: Eurostat.
Poland minus EU15
Poland
473