## Poland’s successful economic transformation can inspire the continent today

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### Poland’s growth and living standards
- Per capita income rose from $13,100 in 1990 to $47,100 today in real terms.
- This year Poland is set to grow almost 4 percent, one of the fastest rates among the EU’s largest economies.
- Since 1989, Polish GDP has grown by 220 percent in real terms.
- Unemployment has dropped from double-digit rates in the 1990s to less than 3 percent today, one of the lowest in the EU.

### Foundations of success: human capital and institutions
- Education and higher education expansion:
  - Over 350 universities and colleges in the higher-education sector.
  - Poland ranks 23rd in the World Bank’s Human Capital Index.
  - Poland ranks 24th in the Penn World Tables’ human capital index.
  - Poland achieves above-average performance in the Program for International Student Assessment—surpassing the EU average on all these measures.
- Accession to international organizations facilitated integration, investment, and technology transfer:
  - Memberships cited: World Trade Organization, Organisation for Economic Co-operation and Development, NATO, European Union.
- Digitalization and leapfrogging:
  - Early adoption of technologies and network infrastructure such as broadband internet.
  - Financial sector adopted modern information technology systems without legacy constraints.
  - State digitalization examples: digital IDs, automated tax filing, online governmental services.

### Convergence, investment, and trade
- Foreign direct investment:
  - Between 2004 and 2023, Poland attracted over $310 billion in foreign investment, almost half of the total of the eight states that joined the EU in 2004.
- Export and specialization outcomes:
  - Since joining the EU, Polish exports of goods and services have increased nearly 3.5 times.
  - Poland solidified an edge in middle-technology goods and built a consistent surplus in service exports.
  - The Polish Economic Institute estimates that European integration has boosted Poland’s GDP by 40 percent compared with a hypothetical scenario in which Poland never joined the EU.
  - Poland has surpassed China as an export market for German products; Polish industry supplies goods to all Europe.

### New and evolving challenges
- Major structural and strategic challenges highlighted:
  - The energy transition.
  - Capital market development.
  - Advancing technological sophistication.
  - Providing greater security in light of Russia’s invasion of Ukraine.
- Fiscal and geopolitical role in the EU:
  - Poland is transitioning from primarily a net recipient of EU funds to gradually taking on a greater financial role within the EU budget and contributing actively to the single market.
- Defense:
  - “Poland’s defense spending—the largest in NATO relative to GDP—is critical.”

### Europe-wide barriers and policy priorities (author’s recommendations)
- Single market limitations and regulatory barriers:
  - “Europe needs deregulation and economies of scale first and foremost.”
  - IMF estimates reported: nontariff barriers within the single market are equivalent to a 44 percent tariff on industrial goods and a 110 percent tariff on services.
  - Regulatory inconsistencies between countries impede private-sector scaling and joint funding for large-scale research.
- Energy and competitiveness:
  - European industry faces electricity and gas prices up to three times higher than those of our main trading partners.
  - A properly executed energy transition is essential for decarbonization and to capture clean-industry value-chain opportunities.
- Call for renewed integration and smart regulation:
  - Advocate for a new wave of economic integration, smart regulation, and simplified laws to enable scaling, joint research, and competitiveness.
  - Optimistic view: “A competitive and secure EU is not just possible, it’s within reach.”

### Greece: complementary national perspective (selected highlights)
- Greece’s turnaround characteristics:
  - Emerging as an unlikely success story with positive growth rates outpacing the European Union average.
  - Significant rebound in investment and historically high exports.
  - Decline in unemployment to levels unseen in over a decade.
  - Fiscal policy delivering increasing primary surpluses.
  - Public debt has decreased almost 55 percentage points of GDP, one of the steepest declines Europe has ever seen.
- Drivers of Greece’s recovery:
  - Prudent fiscal policy to restore market confidence.
  - Sustained effort to heal the banking system.
  - Completion of growth-enhancing structural reforms.
- Qualitative improvements:
  - More favorable business climate, improved financing conditions, better state economic management, restoration of Greece’s investment credit rating.

*Source: Article by Andrzej Domański (National Perspective: Poland) and Konstantinos Hatzidakis (National Perspective: Greece), F&D, June 2025.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2025/06/domanski.pdf_