Overview

  • COUNTRY CONTEXT

    Poland2018
    Population, million38.0
    GDP, current US$ billion524.7
    GDP per capita, current US$13,817
    Life Expectancy at Birth, years (2018)78

    Poland’s economy continues to perform strongly. Real GDP growth is expected to reach 4.7% in 2018, driven by domestic consumption and accelerating investments. 

    Unemployment at slightly above 4% is the second-lowest rate in the 28-member European Union (EU). Poverty and shared prosperity indicators continue to improve in light of surging private consumption that is supported by a tight labor market and government social programs. 

    The three main challenges ahead for Poland are a shortage of labor in the economy, a structural weakening in public finances, and the upcoming political calendar. 

    The shortage of labor will eventually weigh heavily on GDP growth and be exacerbated by the retirement of a significant part of the workforce. A scarcity of workers could negatively affect production capacities and investment, thus heightening pressure on the Government to encourage immigration, which would likely come primarily from Ukraine. 

    The Government's spending plans, which include increases in social benefits and public investment as well as a reduction in the statutory retirement age, could erode the structure of public finances. 

    Strengthening the fiscal position might be difficult given that local, presidential, and parliamentary elections are scheduled to be held within 18 months.

    Last Updated: Oct 16, 2018

  • Strategy

    IBRD Lending2 Loans (US$688 million)
    Reimbursable Advisory Services3 (US$1.34 million)
    Trust Funds2 (US$2.9 million)

    Since the 1990s, the World Bank has been one of the most prominent development institutions in Poland, providing a total of US$16 billion in loans and implementing a number of advisory projects. 

    Poland’s relationship with the Bank is both a partnership of choice and a two-way knowledge collaboration. It is based on the recognition that the Bank’s presence in the country continues to generate value added for both sides: for Poland through access to financial and knowledge services, and for the World Bank through a strengthened relationship with a high-income country. 

    The World Bank Group’s new Country Partnership Framework (CPF) for Poland concentrates the Group’s engagement on key remaining development problems, including the health care system, environmental threats, and regional convergence. 

    KEY ENGAGEMENT

    The World Bank program in Poland consists of two ongoing lending operations (flood management projects) and knowledge and advisory products that help the country address its crucial development challenges, including in the areas of health and regional disparities. 

    Health 

    Since 2013, Poland’s Ministry of Health, the National Health Fund (NFZ), and the World Bank have been working together to introduce enhanced service delivery integration across all levels of care and all types of providers in Poland. The partnership with the World Bank allows for the sharing of evidence-based resources, such as experiences in the design and implementation of integrated care systems. 

    At the start of 2018, the World Bank and the NFZ began implementing integrated care in the primary health care system with the aim of ensuring that diagnostic, therapeutic, and rehabilitation care is focused on patient needs.  

    Under the new agreement, Bank experts will monitor and evaluate the implementation of a pilot project that covers 300,000 people countrywide, contributing to a better quality and greater scope of services for patients. 

    Catching-Up Regions 

    To respond to the challenge that many Polish regions have not fully experienced the country’s development opportunities, the World Bank is implementing a “Catching-Up Regions” initiative that supports Poland’s less-developed regions in a number of areas: fostering science-business cooperation, strengthening vocational education, boosting local entrepreneurship, and improving the energy efficiency of single family houses.  

    The World Bank works hand in hand with national and regional authorities, providing knowledge and practical expertise to help overcome bottlenecks that the regions themselves have identified.

    Last Updated: Oct 16, 2018

  • Economy

    Recent Economic Developments

    Poland’s GDP grew by 5.2% in the first half of 2018, driven primarily by growing domestic demand and accelerating investments.

    Private consumption grew by 4.8%, fueled by a strong labor market, with a 6.7% hike in salaries as well as an increase in social spending, mainly for the Family 500+ program.

    Compared to previous years, government consumption is also gaining momentum. Gross fixed investments continue to recover after a major decline in 2016 caused by a cyclical fall in EU-funded projects, a reduced inflow of foreign direct investment, and elevated political risks. Increased government investments, especially at the local level, influenced by the approaching elections and a higher absorption of EU funding, have both contributed to the rebound of total investments.

    Consumer prices rose by an average of 1.7% in the second quarter of 2018, affected by higher oil prices, a weaker zloty, and a booming real estate sector. 

    Long-term unemployment dropped to approximately 400,000, the lowest number since the economic and political transition in 1989. Employment rates have continued to rise, and labor shortages have started to affect business activity. 

    It is estimated that poverty and shared prosperity indicators continued to improve in 2017 in light of surging private consumption supported by a tight labor market and government social programs.

    Economic Outlook

    Economic growth may reach 4.7% in 2018, driven by both private and government consumption as well as investments. The previous projection of 2018 real GDP growth has been revised upward by 0.1 percentage point due to the stronger performance of consumption demand and rising investments.

    Household spending is set to continue to grow, fueled by higher state spending on pensions and social benefits. 

    However, as the positive effects of the Family 500+ program are fading and not fully offset by increased salaries, the contribution of private consumption to GDP is expected to fall in the coming years.

    Public spending is likely to remain strong, supported by EU funds and by the political cycle leading up to local elections in 2018 and general elections in 2019.

    Overall, economic growth is expected to slow to 3.9% in 2019 and 3.6% in 2020. 

    Fiscal performance remains a challenge despite the sound budget position so far. The general government deficit is expected to be about 1.6% of GDP in 2018, safely below the 3% EU threshold. Spending is likely to rise due to higher government consumption, local pre-election investments, and the decision to roll back the planned increase in the retirement age.

     

     

     

     

     

     

     

     

    Last Updated: Oct 16, 2018

  • PROJECT SPOTLIGHT

    The World Bank has been partnering with Poland to strengthen the national flood protection system and secure the lives, health, and property of citizens since 1997, when the devastating “Millennium Floods” struck the country.  

    This natural disaster reminded Poland of its intrinsic vulnerability to flooding caused by the mountainous and hilly landscape and by decades of neglect. 

    In 20 years, thanks to World Bank support, a considerable stretch of the Odra River has been secured, while Wroclaw, one-third of which was flooded in 1997, today is a vibrant European city. 

    After significant investments along the Odra River, the Government shifted its attention to Poland’s longest river, the Vistula, where the needs are still high. In 2015, the Government launched the Odra-Vistula Flood Management Project. Its development objective is to increase access to flood protection for people living in selected areas of the Odra and the Upper Vistula river basins, and to strengthen the institutional capacity of the Government to mitigate flood events more effectively. 

    The total project costs are €1.317 million, with World Bank financing amounting to US$504 million. The project implementation period is eight years. Subsequent contracts for civil works and technical assistance are being signed and are currently under implementation. 


LENDING

Poland: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments



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Additional Resources

Country Office Contacts

Warsaw, Poland
Warsaw Financial Center, 53 Emilii Plater Street
00-113 Warsaw, Poland
Tel: +48-22-520-80-00
warsawoffice@worldbank.org
Media Contact
Filip Kochan
fkochan@worldbank.org