Poland's Economic Performance - Two Thumbs Up

Poland's GDP growth will reach 6.5% in 2007. The European Commission sees such considerable growth as a result of better than expected economic results for the second quarter of this year as well as promising prospects for the future. For the third quarter it forecasts 1.2% growth and for the fourth 1.3%. According to the Commission, growth of this scale is mainly boosted by internal demand. Among the most important factors the Commission mentions a rise in consumption bolstered up by diminishing tax burdens and an improving situation on the job market.

The Commission praised Poland for a rise in the employment rate between the first and the second quarter by 1.2%. "This means that around 300,000 people have found a job", reports the Commission with satisfaction. "The situation will continue to improve but at a slower pace," says the EC's report. However, the Commission also notes the fact that the improvement of the situation on the job market has stimulated higher pay expectations, which in turn is one of the factors contributing to inflationary pressure. It also mentions the shortage of workers in some market sectors as well as rising prices of petrol and food. This is why the new forecasts say inflation in Poland will be 2.4%, and not 2%, as has been estimated earlier.