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Poland’s economic performance is based on four solid fundamentals.
The first, and most important one, is the process of productivity catch-up. Current real productivity / average labour cost ratio in Poland creates a significant comparative advantage for the country as a location for production activities. The favourable labour-productivity ratio is even more visible in the case of newly constructed factories and service centres.
The second fundamental is the human capital of the country. The share of young people in Poland’s total population is considerably higher than in Western Europe, and the ageing process is much less advanced. Moreover, Poland has a large pool of highly skilled workers and one of the highest rates of involvement of students in tertiary education in Europe.
The third fundamental is the currency. After long years of stabilization efforts made by the fully independent central bank, the country now enjoys inflation of less than 3%. As productivity growth is much more robust than in Poland’s major trading partners, the currency has been under real appreciation pressure for the last few years.
And finally, due to the growing credibility and prospects of Euro adoption, interest rates have converged to a level not much higher than in Western Europe.
Finally, the fourth fundamental is EU membership. The largest benefit of EU entry has been the wide range of business opportunities. The huge European market is fully open to Polish products, while at the same time investors are moving into the country. The upgrade of the legal and regulatory system, required for entry, helped to enhance the image of the country.
Last but not least, the large EU development funds available for Poland under the 7-year EU financial plan will help in solving the problem of the country’s outdated infrastructure.
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