Growth

“There are no great limits to growth because there are no limits to human intelligence, imagination, and wonder.” These the positive words of that that most positive of U.S. presidents, Ronald Reagan. And he is right, although all too many who should know better seem to be exercising an alarming degree of self-restraint when it comes to exercising their intelligence, too many of whom seem to have strayed into the public arena. Be that as it may, where does Poland stand on the growth front?

In a good position, according to the National Bank of Poland (NBP), the Polish central bank. According to a forecast published by the NBP on Monday, the Polish GDP will grow by 3.7 per cent this year, after a temporary slowdown in growth last year, helped by increased investment and an inflow of EU funds. The rate of inflation is also expected to rise but will not exceed 2.5 per cent by the end of 2019. The NBP also predicted increased private consumption as a result of rising household incomes reflecting “an improved situation on the labour market” and the introduction of the government’s flagship 500+ programme, giving new state benefits to families.

Poland’s central statistical office said last month that the Polish economy grew 2.7 per cent in the final quarter of last year and in a preliminary estimate at the end of January, it said that the economy grew 2.8 per cent in 2016, compared with 3.9 per cent in 2015. The government’s budget is based on forecast growth in GDP of 3.6 per cent in 2017.

This chimes with the European Commission’s optimistic forecast for Poland’s economy for the next two years. Valdis Dombrovskis, the Vice President of the European Commission said on Thursday in an interview with Gazeta Wyborcza, that growth in GDP is estimated at above three percent in both 2017 and 2018, with the unemployment rate falling to 5.6 per cent this year and 4.7 per cent in 2018. However, the budget deficit worries the Commission. “We estimate that the deficit of the Polish budget this year will be 2.9 per cent of GDP and 3 per cent in 2018. It is at the [upper] threshold of the EU,” Dombrovskis said. If Poland’s budget deficit exceeds the threshold, it might be placed into the EU’s Excessive Deficit Procedure.

And, of course, if there is one thing of which the government is wary, it is those EU procedures. Following last week’s diplomatic triumph at the EU summit, where Donald Tusk was re-elected president of the European Council by 27 to 1, despite the sole opposition of Poland, Polish prime minister Beata Szydło, was treated to a hero’s welcome by the PiS party leader and other ministers when she arrived back in Warsaw. “We showed that Poland is a fully-fledged member of the European Union,” she said, adding: “We want the bloc to be united, to grow, and we will do everything to make that so.” Jarosław Kaczyński said he was proud of Szydło’s achievements, adding that she had been put in a difficult situation and defended Poland’s interests. The former is certainly true.

Despite the Polish foreign minister’s reaction to the summit, with comments made to Super Express that the EU has shown it has double standards, so Poland must limit its faith in EU, indeed that it would have to implement “negative policy” which would include blocking EU initiatives in order to “exacerbate the game”, there seems to be no wish to dismantle or leave the EU.

Not only has Marek Magierowski, a spokesman to Polish President Andrzej Duda, said that there will eventually be cooperation between Duda and Donald Tusk “once emotions subside,” but deputy foreign minister Jan Dziedziczak has said in an interview with Polish broadcaster Telewizja Republika that suggestions Poland’s governing party wishes the country to leave the European Union are “nonsense”, adding that the idea was put forward “for the sake of inter-party rivalry”. Jarosław Kaczyński said suggestions Poland wanted a Polexit were deceptive and manipulative, and PiS spokeswoman Beata Mazurek said the party is not interested in dismantling the EU

So there you have it. Despite the self-imposed diplomatic set-back last week and the continuing tussles with the EU over the rule of law and others, Poland has no plans to leave, which should be good for continued economic growth.

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