A SUPPLEMENT TO EUROMONEYPoland's strong 1995 GDP growth of 7% is a signal that recovery is on its way. The officially projected real GDP growth for 1996 is 6%, although a slight downward revision is highly likely. Poland increased industrial output in 1995 by 9.4%. After an early 14% surge in 1996, the first effects of the German recession reduced demand (Germany absorbs 38% of Polish exports). This combined with real zloty appreciation have negatively impacted exports. Moreover, domestic demand, while growing strongly, is not large enough to replace external demand in maintaining industrial output growth. Nonetheless, industrial output will grow 8% in 1996, underpinned by investment (up 12%) and consumption growth. Labour productivity has grown 9% and real wages 6.2% through Q1 1996 while the unemployment rate has remained unchanged at approximately 15%. Inflation-reducing measuresThe Central Statistical Office has increased its forecast of 1996 inflation from 17% to 19%. A CPI figure of 8.9% through April was caused by an increase in annual services (gas, telephone, etc), higher-than-expected food prices and a continued inflow of foreign currency. The rate of inflation fell approximately 27% on a year-on-year basis, ending the year at 21.6%. |