Midtown Blogger/Manhattan Valley Follies: Europe Recovering from Crisis- Warsaw Voice

Business & Economy

Europe Recovering from Crisis

February 27, 2015

Article's tools:

This year all EU economies will grow for the first time since 2007, according to the European Commission’s winter economic forecast. The Commission expects the EU as a whole to grow 1.7 percent and the eurozone economy to expand by 1.3 percent. For 2016, the projections are 2.1 percent for the EU as a whole and 1.9 percent for the eurozone.

While economic growth prospects for Europe are still limited due to high unemployment and relatively low interest in investment, the short-term outlook has improved, according to the Commission. This is due to a string of events that have taken place in recent months. The oil price drop has accelerated, the euro is clearly weaker than it used to be, and the European Commission has unveiled an investment plan for Europe. Taken together, these factors will stimulate economic growth, the Commission says.

Improving economic forecasts for Europe are good news for Poland because the EU as a whole is Poland’s most important economic and trade partner.

Poland is expected to remain one of the fastest growing economies in Europe this year, with at least 3 percent GDP growth. Last year, Poland was a top performer in Europe in terms of economic growth. According to Eurostat, the EU statistics office, which recently compared seasonally adjusted growth indicators, in 2014 Poland came in second in Europe with 3.1-percent GDP growth, right after Hungary (3.4 percent) and ahead of Britain (2.7 percent).

Clearly impressed by Poland’s upbeat macroeconomic performance, Standard & Poor’s Ratings Services in February upgraded the country’s long-term outlook to positive. The new outlook means the agency expects a steady rise in government revenue on the back of sustainable economic growth. This is expected to help improve the resilience of the Polish economy and its debt service capacity.

In other good news, Poland has improved its position in terms of the Index of Economic Freedom compiled by the Heritage Foundation and The Wall Street Journal. The new ranking puts Poland at number 42, an impressive eight notches up from the previous year. This is the highest Poland has ever scored on the index and the biggest improvement among all 43 European countries considered in this league table. Poland currently ranks 19th in Europe, four notches up from a year earlier.

The significantly improved Index of Economic Freedom standing is a good sign, but Poland still has a lot of work to do to catch up with entirely free economies such as Hong Kong, Singapore, New Zealand, Australia and Switzerland (as per Index of Economic Freedom criteria). Poland still has bureaucratic barriers that hinder business. Despite promises made by consecutive governments, removing the barriers has been an excruciatingly long process.