From The Times

January 9, 2009
Poland has appeal as a calm haven amid turmoil

Kamil Tchorek in Warsaw

div#related-article-links p a, div#related-article-links p a:visited { color:#06c; } Dell's move to Poland is the latest in a long line of foreign investment into the EU's largest post-communist economy. The attraction has been Poland's convergence with the EU economy and the promise of EU funding.
A highly skilled, hard working and relatively cheap workforce has attracted production plants for General Motors, Whirlpool appliances and LG Electronics technical goods. West European groups such as Castorama, Tesco and Cadbury are heavily invested in Poland, where long-term macroeconomic data points to steadily increasing spending power.
Polish unemployment has fallen from more than 20 per cent to about 9 per cent and exports have nearly doubled in less than five years of EU membership. Last year, the zloty hit a 12-year high against the pound and a six-year high against the euro, as GDP raced ahead at about 5 per cent and exports soared, even from the unwieldy farming sector. There were more stock market flotations in Warsaw than in London and 2008 looked like Poland's breakthrough moment.
But all that changed in late summer when the financial crisis gripped world markets. The zloty slumped and industry was hit by a fall in demand for exports. In November output data showed an 8.9 per cent decline. In response, interest rates were cut from 6 per cent to 5.25 per cent in December. Forecasts for 2009 growth have been downgraded, particularly on concerns about demand from Germany, Poland's biggest trading partner. Economists expect unemployment to rise.
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It seemed that an economic miracle had been stopped in its tracks, but it is tempting to see Poland as a calm haven in a financial storm.
Eurostat, the European statistical office, said that in the third quarter of 2008, the EU's GDP fell by 0.2 per cent compared with a year earlier. But Poland's growth was the second highest, at 1.2 per cent. Economists say Poland and Slovakia will be the EU's fastest growing economies this year. The zloty is starting to claw back as investors see Poland as different from the far riskier markets such as Hungary with consumer spending strong and house prices quite stable. It appears that Poles are returning home from the UK and Ireland with newly acquired self-confidence and entrepreneurial spirit.
Preparation for Poland's hosting of the European football championships in 2012 is stimulating the construction sector. The pro-business Civic Platform party was elected in October 2007 with promises to cut red tape, increase private enterprise and adopt the euro by 2012.

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