OECD Economic Survey of Poland 2023 - Presentation

Sustained progress in convergence of living standards

GDP per capita

Thousand USD, constant prices, 2015 PPPs

CEE (average of CZE, HUN, SVK)

EA4 (average of DEU, FRA, ITA, ESP) POL

Source: OECD Economic Outlook 110 database.

Source: OECD National accounts database.

Poland is hosting around 1.6 million refugees

Ukraine refugees

% of population, as of 31st Jan 2023

Source: OECD Economic Outlook 110 database.

Source: United Nations High Commissioner for Refugees (UNHCR)

Inflation has peaked but remains high

Source: OECD Economic Outlook 110 database.

Note: Preliminary data for January 2023.

Source: OECD Main Economic Indicators (MEI) and Statistics Poland.

Economic growth has slowed

Source: IMF.

Source: OECD Economic Outlook database.

Macroeconomic policy needs to strike a fine balance

Monetary policy has been tightened to tame inflation

Fiscal policy has been loosened to reduce cost of living pressures

Source: IMF.

Note: Panel B refers to gross fiscal costs.

Source: OECD Analytical Database; and OECD calculations based on the OECD Energy Support Measures Tracker and the OECD Economic Outlook 112 database.

Fiscal sustainability

VAT and property taxation can bring more revenues

The value added tax has many exemptions*

Source: IMF.

* Note: % of theoretical VAT liabilities. So-called “actionable VAT gap” takes into account reduced rates and exemptions but exclude exemptions on services that cannot be taxed in principle, such as imputed rents or the provision of public goods by the government.

Source: VAT gap in the EU - Publications Office of the EU and OECD tax database.

Public pensions to provide modest incomes

Illustrative future public pension net replacement rates

Source: IMF.

Note: The future net replacement rate is defined as the individual net pension entitlement divided by net preretirement earnings, taking account of personal income taxes and social security contributions paid by workers and pensioners, for a worker with average earnings and a full career from age of 22.

Source: OECD pension models.

Transition to net zero greenhouse gas emissions

Coal remains an important source of energy

Exposure to pollution is high

Average level of PM2.5 pollution experienced by the population

µ/m³, 2020

WHO threshold: 10 OECD (2019): 13.9

Source: IMF.

Source: OECD Greenhouse Gas Emissions database.

Digitalisation

Reaping the digital dividend

Potential medium-term gains in firm productivity

when closing a quarter of the gap vis-a-vis OECD best performers

Effect for Poland

Upgrading skills (technical and managerial)

Effect for the average OECD country

Higher use of high-speed broadband

Easier financing for young innovative firms

Reducing regulatory barriers to competition and reallocation

Source: IMF.

Source: Sorbe et al. (2019), "Digital dividend: policies to harness the productivity potential of digital technologies", OECD Economic Policy Papers, No. 26.

Adoption of digital technologies in firms is lagging

Diffusion of selected ICT tools and activities in enterprises

% of enterprises with ten or more persons employed, 2021 or latest available

http://oe.cd/bus

Source: IMF.

Poland OECD average Top performer

Share

Digital skills of older adults are low

Note: Data by educational attainment and by gender refer to individuals aged 25-64.

Source: Eurostat.

Source: IMF.

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Main recommendations

Main recommendations on macroeconomic and fiscal policies

Ensure that energy-related support measures to households and firms remain temporary and that fiscal policy does not add to inflationary pressure. Any future supports should be better targeted to the most vulnerable.

Continue to ensure that currently elevated inflation expectations do not become entrenched and stand ready to increase interest rates further if necessary.

Continue efforts to support and integrate refugees and prepare in case of a further influx.

To improve fiscal credibility, consider long-term changes to the numerical fiscal rules, taking into account the outcome of the EU economic governance reforms, and establish an independent fiscal council.

In the medium-term, undertake fiscal consolidation. Broaden the revenue base by reforming or phasing out ineffective and regressive tax expenditures and revising property taxation. On the expenditure side, improve targeting of social supports and conduct a comprehensive spending review.

Source: IMF.

Extend working lives, including by aligning gradually male and female statutory retirement ages and increasing it in line with life expectancy gains in good health.

Make the healthcare strategy better integrated across the various actors in the system. Over time, increase the remuneration of health workers.

Source: OECD, Main Science and Technology Indicators database; OECD, R&D tax expenditure and direct government funding of BERD database;

Main recommendations on unleashing the digital potential of the economy and increasing competition

Expand consultancy services that offer expert technical advice to facilitate investment in digital technologies among SMEs.

Increase direct funding for ICT R&D.

Increase the flexibility of formal and non-formal education through more modular training, making use of recognition of prior learning and micro-credentials.

Adopt individual training accounts and make training rights portable from job to job.

Promote lifelong learning, particularly among those working in SMEs and, the less educated, the inactive and the older population.

Provide ICT equipment in schools and training for vocational education and training teachers to teach digital skills.

Continue increasing the number of women studying ICT through targeted awareness campaigns and scholarships.

Reduce regulatory barriers to competition for lawyers, notaries, architects and engineers, as well as in occupational licensing.

Source: IMF.

Building on the previous anti-corruption strategy, strengthen public integrity by delivering on its past priorities, addressing remaining issues and involving the non-governmental sector in the formulation and evaluation of the new strategy.

Source: OECD, Main Science and Technology Indicators database; OECD, R&D tax expenditure and direct government funding of BERD database;

Main recommendations for strengthening green and sustainable growth

 Implement the updated principles of the energy strategy with an emphasis on accelerating development of renewables, diversifying technologies and improving energy security and efficiency, while minimising the increased reliance on coal in the near term.

 Expedite and scale up investments in the electricity grid, while reviewing regulations and other policy constraints hindering further expansion of renewables.

 Set out a clear long-term path for carbon pricing. In the medium term, increase the national emissions fee and eventually align it with the European Union Emissions Trading System (EU ETS).

 Ensure a just transition through well-targeted retraining, a hiring freeze and inter-sectoral upskilling for the hard and lignite coal sectors. Complementary policies are needed for the wider coal value chain

Source: IMF.

Source: OECD, Main Science and Technology Indicators database; OECD, R&D tax expenditure and direct government funding of BERD database;