Is It Crisis Time Yet?

The Polish economy that grew at a brisk 6.7 percent in 2007 swelling the ranks of the middle class with money to spend on fine wines, fancy cars and large homes slowed to a still-healthy 4.8 percent in 2008, according to government figures.

Data released this week however shows that Poland is starting to feel a chill as the global crisis hit the country's western European neighbors and the United States causing a slowdown in the manufacturing sector as foreign orders fall.

The question now is how bad things will get. Many experts still believe Poland can weather the storm better than other European countries and manage modest growth in 2009, although it exports heavily to countries already in recession.

Despite the souring mood, there are some reasons for optimism.

Polish banks are tightly regulated and were never burdened by the toxic assets that have brought down financial institutions elsewhere. Economy Minister Waldemar Pawlak says Polish banks, mostly owned by large Western European banks, are often in a much better situation than their parent companies.

And bucking the larger trend, retail sales in December grew 6.6 percent over the same month in 2007, better than experts expected.