Challenges to the pace of economic recovery
Overview:
The Polish economy has weathered the global economic crisis well. It is the only country in the EU that has maintained positive y-o-y GDP growth throughout the global crisis. It does, however, face a number of challenges to maintaining the robust economic growth of over 3% recorded in Q4 2009. The zloty has appreciated sharply in nominal terms and may undercut export performance if large capital inflows continue to push it further. Credit growth remains constrained. Moreover, the budget deficit is now very high and will require serious, medium-term fiscal adjustment. Public debt to GDP has increased and threatens the constitutionally defined limit. A Civic Platform victory in June presidential elections and the announcement of a credible fiscal program would speed possible EMU entry.