Inclusive

“Smart, sustainable, inclusive growth is the key to job-creation and the future prosperity of Europe.” The words of Jose Manuel Barroso, former prime minister of Portugal and president of the European Commission who, one assumes, might have known although the words are as blindingly obvious as to merit no detour on the road to enlightenment. No matter, the Polish prime minister for one is happily presiding over a booming economy which is geared towards “inclusive growth” to create equitable opportunities for all, according to an opinion piece posted on the wsj.com website entitled Meet the Polish Tiger.

Mateusz Morawiecki wrote that Poland’s market economy is booming allowing the government to take care of the least fortunate.  “Poland recently became the first country in nearly a decade to graduate from emerging-market status and enter the ranks of the world’s developed economies.” Last Monday Poland had its capital market upgraded from emerging to developed market status by leading index provider FTSE Russell. Thus, the Polish capital market became the first in Central and Eastern Europe to join the ranks of developed markets such as the United States, Japan and Germany.

According to Morawiecki, “the distinction is the fruit of a long effort to build a flourishing market economy on the ruins of the communist system that the Solidarity movement helped topple in 1989.” Reprising a familiar theme, he said that while the economy as a whole prospered some people found themselves left behind as success “too often” depended on “connections, not hard work”. He also said that his government led by the Law and Justice party had “cracked down on rampant tax fraud and evasion,” increasing revenue from value-added tax by 26 per cent in just two years, assisted by enhanced enforcement and innovative digital tools.”

Morawiecki said Poland’s ruling conservatives had invested in healthcare, education and public works projects. “We have shown that helping the least fortunate isn’t incompatible with growth,” adding that Poland’s economy had expanded by more than ten per cent over the past two-and-a-half years, “the most among the top 10 EU economies.”

And the statistics do look good. Ratings agency Moody’s last month revised upward its forecast for Polish GDP growth this year to 5 percent,  projecting economic growth next year at 4.2 per cent. The Polish economy grew 5.1 per cent in the second quarter of this year, the country’s Central Statistical Office said in late August. According to Eurostat, Polish unemployment in August was the second lowest in the EU at 3.4 per cent, against the highest, in Greece at 19 per cent, and an EU average of 6.8 per cent.

So far so good, but the economy may slow according to Grzegorz Maliszewski, chief economist at Bank Millennium, who was speaking after Poland’s Purchasing Managers’ Index (PMI) hit a 23-month low of 50.5 points in September, according to Markit, a provider of financial information services. This was compared with analysts’ expectations 51.5 points, and a December figure of 55 points. According to Markit the Polish manufacturing sector was “close to being stagnant” in September, with the number of new orders shrinking for the first time since October 2016.

Be that as it may, thousands of police and other uniformed services took to the streets of Warsaw on Tuesday to demand higher pay and more favourable pension rules.Police officers, border guards, prison service employees, firefighters and others took part in the rally, during which protesters planned to petition the country’s president and prime minister with their demands. Deputy Interior and Administration Minister Jarosław Zieliński told Polish Radio 24 beforehand that the demonstration appeared to have been politically motivated. He said the government had increased the monthly pay of police officers by over PLN 1,100 (EUR 256, USD 295) on average since coming to power, and noted that protests over pay were not held when police wages were unchanged stayed put under the previous government led by the Civic Platform party.

And according to BIG InfoMonitor and the Credit Information Bureau, companies that collect data about debt, over 345,000 people aged 64 or over have failed to make payments on their loans, the PAP news agency reported. The average debt among people aged 64 or over stands at PLN 21,230, with many citing medical expenses as a reason for indebtedness, along with arrears of rent, telephone and utility bills.

So, there is still some way to go before everybody is included in Poland’s economic boom.  And as the economy’s period of catch-up draws to a close, and economic growth slows, those clouds on the horizon, demography, innovation, and skills will grow larger. Let’s hope the government is making hay while the sun shines.

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