Poland, whose population at the end of 2016 amounted to more than 38.63 million people, is the largest member of the European Union among all countries of Central and Eastern Europe. The area of Poland leaves 312 679 km 2 . By the number of inhabitants, this country occupies the thirty-fifth place in the world and the sixth place in Europe. We offer a macroeconomic analysis of its economy, during which we consider the dynamics of changes in Poland’s GDP, as well as the current state of this indicator.
Basic Information on Poland's Economic Indicators
This country has access to the sea and borders with 9 European states. These factors strongly affect the development of its economy. Poland is the ninth in the EU and twenty-fifth in the world in terms of per capita gross domestic product .
In the structure of Poland's GDP, 63.5% - services and transport, 33% - industrial production, 3.5% - agriculture.
In relation to the HDI, this country is classified by the United Nations as highly developed (the highest level on the UN scale). This rating is based on the following factors:
- Life expectancy.
- Years of secondary education for 25-year-olds.
- The expected number of years of schooling.
- Gross national income per capita, taking into account purchasing power parity.
In the HDI ranking included in the 2015 Human Development Report, Poland took 36th place among the 188 countries on the list.
GDP growth dynamics
In 2014, Poland ranked fifth in the EU after Luxembourg, Ireland, Hungary and Malta (according to Eurostat). International institutions, including the OECD and the European Commission, expected the Polish economy to grow by 3.4-3.5% in 2016.
In recent years, observers have become accustomed to the relatively good dynamics of Poland's GDP against the background of Central and Eastern Europe, as well as the entire European Union. This was especially noticeable in 2009, when this indicator (according to Eurostat) grew by 1.6%. This pace has made Poland the only EU country with positive economic growth. Recall that in 2009 in the European Union recorded a recession with an indicator of 4.1%.
Also in 2010 and 2011, the Polish economy stood out among European countries: Poland’s GDP growth of 3.9% in 2010 was the third largest in the EU, and reaching the threshold of 4.5%, Poland in 2011 took fourth place among 27 states members of the European Union.
GDP growth dynamics per capita
In 1990, Poland said goodbye to a centrally planned economy. In 2016, Poland's GDP per capita increased 8.5 times - from 1,731 US dollars (at current prices) to 15,048 US dollars. This is clearly illustrated in the graph below.
In terms of growth rates, Poland has outpaced all OECD states and all of Europe. Poland’s GDP growth over the years allowed it to take 13th place in the global list based on World Bank data. If we confine ourselves only to the OECD (Organization for Economic Co-operation and Development) members and European countries, Slovakia is very close to Poland, which has slightly lower growth rates. And the Czech Republic, where per capita income has increased four and a half times, takes only 36th place.
GDP growth
At the end of 2016, Poland's GDP reached $ 469.51 billion, and at the end of 2017, an indicator of $ 509.96 billion is expected.
Countries that for half a century shared the fate of Poland as satellite states of the Soviet Union, and then clung to a mirage of alternative paths for development for a long time, fearing a free market economy with all its pros and cons, paid a very high price for not wanting to carry out reforms. They lost time, resources and people, achieving much less results than Poland. So, in Bulgaria GDP per capita increased only three times, while in Hungary the growth was 3.7 times.
The Baltic states could also achieve the same results that are observed in Poland, but their economically independent life began a little later. The World Bank has data related to these countries only since 1995.
GDP of Poland and Russia
Let us conduct a brief comparative analysis of the economic situation of these countries. Russia's GDP in 2016 amounted to 1 trillion 283.2 billion dollars.
Comparing the per capita GDP of Poland and Russia, we can say that in our country this indicator also does not stand still, but it is developing at a more moderate pace. The results are influenced by the difficult economic situation of Russia during the period of perestroika and some time after its completion. The 2016 figures were also affected by a drop in oil prices, one of the main sources of income for Russia, which is absent in Poland. It can be seen from the above diagram that the most deplorable state is observed in Ukraine, where at present the GDP barely reaches 77% of the level that it was in 1988.
World leaders in GDP growth
As a rule, such data contains certain distortions. Equatorial Guinea, which is a tiny country with a very strict dictatorship , is the global leader in terms of revenue growth. 20 years ago, oil production began here. In absolute terms, “black gold” is relatively low in Guinea (1.1 billion barrels per year), but in terms of per capita this produces 900 barrels, which is 100 barrels more than in Saudi Arabia. Therefore, it is not surprising that GDP per capita in this country has increased almost 50 times, although the profit goes only to the dictator and his clique.
Two Asian leaders in GDP growth
The number one phenomenon in the world is China. It is followed by Vietnam. Some analysts call China the phenomenon of world economic dynamics. Between 1990 and 2015, per capita GDP was increased 25 times.
Vietnam and its citizens are also admirable for the determination with which they overcome the consequences of wars. This country is likely to develop even faster if it can break the shackles of the still ruling Communist Party.
Poland's GDP growth rate
To consider this indicator make a comparative description of the years. Poland still shows itself very well in terms of absolute GDP, the results of which put it on the first lines of the list.
If Poland wants to catch up with Germany, it will take at least half a century to compensate for the difference in per capita GDP that is observed in these two countries.
Based on current prices, per capita GDP in Germany is currently 3.3 times higher than in Poland, at $ 41,331 versus $ 12,555.
If we assume that the population and prices in both countries will remain the same, then in 2067 the average GDP per Pole will be more than $ 89,000, while the average GDP per German resident will be $ 87,000.
Why should Poland continue to catch up
United States GDP is equal to 18 trillion US dollars. Americans spend 17.1% on healthcare, a little over $ 3 trillion a year. In Poland, healthcare accounts for 6.4% of GDP, including public and private spending, which is less than $ 30 billion per year.
Therefore, in the United States of America they spend 100 times more on health care in absolute terms than in Poland. This comparison does not have a common base (for example, per capita), therefore, it serves only to illustrate the potential difference based on the assertion that a huge hospital with experienced staff will cope better with a seriously ill patient than a good, but small clinic where only a pair of doctors.
In 2014, in terms of per capita, healthcare costs in Poland amounted to $ 910 per person, in the United States - 9,403, and in Germany - 5,411. Experts believe that it makes no sense to compare Poland with the United States, since the level of health spending in This distant country is greatly inflated due to legal protection problems, and also due to the rapid introduction of all successful new treatment methods, equipment and technologies. Consequently, Germany would be a more appropriate starting point for Poland.
In absolute terms, healthcare costs in Poland increased four and a half times between 1995 and 2014, that is, from 197 to 910 dollars per capita. This is the so-called nominal increase. It is due to rising prices. The actual increase was much less.
Inflation calculator
To operate with numbers showing the economic condition in different countries, you need to correctly. To do this, we can use the "inflation calculator", which is located on the website of the Ministry of Finance of Poland. There is a small problem here, as the program is oriented towards Polish zloty, and the World Bank has converted PLN into US dollars. Therefore, you have to adjust the data taking into account the exchange rate.
According to the inflation calculator, in 2014, $ 910 was equivalent to $ 321 in 1995. This means that the real increase in spending over 20 years amounted to 63%. The opinions of many Poles confirm this assessment. People say that over the years, too little has changed in the health care system.
In Germany, the nominal increase in health spending was similar to the real increase in Poland and amounted to a modest 73% over the same period (1995-2014). However, this should not be a consolation to Poland, since in 1995 the cost of health care for its western neighbor per capita was almost 16 times higher. In other words, 20 years ago the Germans were already receiving good medical care, so their progress in this area should be slower. Germany spends 1% less than Poland on healthcare, as its share in such expenditures in GDP is 5.4%. Today's Polish newborns will have to wait until the end of the 21st century before the per capita health care costs in these two countries reach the same level. This will become possible under the following conditions:
- All numbers will be reduced to a common denominator.
- The number of residents will remain unchanged.
- Exchange rates and prices will be frozen.
- The share of health spending will remain constant in both of these countries.
- The difference in economic growth rates will remain at the current level.
The share of private consumption in Poland's GDP is about 60%. Poles must spend more than $ 6 billion in one year. On a scale of a densely populated country, this is not a very large amount, since it is only $ 70.2 per person per year.
Creating conditions for the development of the country and its economy is one of the most important activities. Poland must continue its efforts and fight for every percentage point of economic growth. Other countries (Germany, France, Japan, USA, Sweden) so far can rest on their laurels.