NEWS

- The pessimistic forecasts are of a level of 5%. I think we can maintain even a 6% GDP increase in 2008, if the barriers and obstacles to the growth of trade, which restrict business activities can be removed – Mr Pawlak stressed.

- It appears that the information from the 3^rd Q 2007 allows for more optimism, though there have been pessimistic forecasts, our economy is performing well. What is in our control and within our capacity is e.g. the improvement of business regulations, upon which we will place the greatest priority – the Deputy Premier stated.

- Fewer controls more trust in people and businessmen and more positive incentives – said Mr Pawlak. The Deputy Premier also expressed the hope that inflation in 2008 would be lower than in 2007. He expressed the opinion that it was possible to slow down the rate of increase in the charges of the energy suppliers.

The Deputy Premier forecast that unemployment in Poland would fall to a single digit figure in 2008. In accord with the December report of the Central Statistical Office (GUS), showing that in November unemployment had fallen to 11.2% from 11.3% in October.

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- We’re currently negotiating over a dozen projects with firms from the BPO sector. Everything indicates that in 2008 and the following years this sector among those emerging in Poland, will be one of the most important - said Dr Paweł Wojciechowski, PAIiIZ’s president.

Among the largest projects realised with the help of the Agency, is the centre to be opened by the British company Valassis in Białogard and that of the ABN Amro bank in Warsaw. Each firm intends to employ app. 600 people. 500 jobs will be created both at HSBC in Krakow and at KPIT in Wrocław. Apart from service centres there will be other investments in R&D centres (e.g. GE Energy and EMCC). PAIiIZ support investments in this sector as they create valuable jobs – those for highly qualified personnel. Due to the demand for higher education graduates, these investments then influence the development of Polish universities.

BPO stands for Business Process Offshoring, the name for the services sector by which international corporations assign work to companies in other countries. This allows for labour costs to be reduced and the usage of often greater human resources in a particular country - the targeted location. By this human factor, the so called “HR Pool” - the availability and qualifications of personnel becomes the most significant factor in choosing an investment location. In the category of investment attractiveness in the BPO sector, Poland is ranked top for consultancy firms.

Warszawa, Wrocław and Kraków are today the most popular destinations for BPO investments in Poland. But the time should also come for smaller cities such as: Lublin, Olsztyn and Szczecin. According to the DIS report: “IT Monitor 2007”, in the 100 BPO centres, work has been found for almost 1.7 thousand people.

Among the most significant competitors for our country are: India, the Czech Republic, Hungary and Rumania. Poland’s strengths are above all the well qualified personnel, knowledge of foreign languages and the low investment risk.

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INVESTMENTS IN POLAND

The first permit was granted to SILKA PRODUCTION Sp. z o.o. for business in the Oława sub-zone. The company will manufacture and sell building materials on a 6 ha plot. The investor has guaranteed to invest app. 40 million PLN and employ at least 25 workers. The projects completion will by the end of 2009.

At the end of December the company: INPOL-KRAK TUBES SERVICES CENTER Sp. z o.o. was granted a business permit. The investor has promised to invest in excess of 8.3 million PLN and to employ at least 10 workers. The firm has purchased a site of 2.5 ha in the area of the Kluczbork sub-zone. A computer-programmed production line using lasers for cutting pipes and profiles will be set up. The company plans to begin trading by 2012 at the latest.

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• Inflation: NBP - The forecast for inflation in December 2007 was 3.2%. In December 2007 the annual inflation figure, i.e. the CPI indicator form year to year was 3% - it was stated by the National Bank of Poland.
  According to the Ministry of Finance inflation in December stood at 4% on an annualised basis and 0.3% on a monthly rate - the ministry said in a communiqué.

• Labour Market:

  • In November the unemployment rate had fallen to 11.2% from 11.3% in October; the Central Statistical Office stated on Friday. In November 2006 the unemployment rate was 14.8%.

  • In the projected budget for 2008, the government confirmed that at the end of 2007 the number of registered unemployed was app. 1.7 million people, with the unemployment rate forming at 11.3%, whereas by the end of 2008 it is expected to be 9.9%.

• Foreign Trade:

  • Exports for the first 10 months of 2007 were at over 83 billion EUR. Their value compared to the same period in the previous year grew by 14.2%. Imports grew by 16.4%, to a level of 96.2 billion EUR – the Ministry of Economy stated.

  • Favourable changes were noted in the balance of trade with Russia. The value of exports to that country grew by over 3.8 billion EUR and by 26% compared to the analogous period in the previous year. Equally imports from Russia increased by only 2.5%, i.e. by only a tenth of the export figure for the period. As a result the trade deficit was reduced to 4.5 billion EUR from 5 billion the year before.

  • Exports to the EU countries rose slower than normally. They exceeded 65.5 billion EUR (an increase of 13%). Whereas exports to the developing countries reached 5 billion EUR in the period growing by 10% and the imports from these countries grew to a level of 17.7 billion EUR, i.e. up by 26.7%.

  • From January to October 2007 the most dynamic growth was recorded in products in metallurgy, chemicals, food and agriculture and in the electromechanical industry.

• Exchange rates (as of 03.01.2008):

	Buy	Sell
USD	2.4379	2.4871
EUR	3.5722	3.6444

Source: www.nbp.pl

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ANALYSES AND REPORTS

The new government will profit from a rapidly growing economy and falling unemployment, but at the same time will be faced with increasing inflation and other difficult tasks. According to Mr Krzysztof Orłowski, it will be hard to beat the record of economic growth established this year. In 2008 the growth rate may slow down slightly.

Important symptoms of these trends are the rising inflation, the increasing trade deficit and the large increases in borrowing. Hover, not everyone agrees with these fears: - The trade gap does not constitute a danger, as it is financed by the direct investment inflow - claims Mr Bohdan Wyżnikiewicz, vice president of The Gdańsk Institute for Market Economics - the situation is normal, particularly as exports are growing well. - he added.

In his opinion, the increase in inflation and pay are a bigger threat. - In the long term perspective, it appears that the increase in work productivity was much higher than the salary increases of the last few years.

According to Nowy Przemysł, the positive economic climate was noticeable particularly in the mining industry, the energy sector, the fuel sector and in industrial chemicals. Poland’s biggest electro-energy company, the Polish Energy Group, was created from a merger. It’s most important project is the construction of a nuclear power plant in Poland by 2021.

- This year’s economic growth will be slightly slower than in 2007, slightly over 5%, rather than 6% of the previous year – says Mr Andrzej Bratowski, chief economist at the Pekao SA bank.

According to him, one of the biggest risks over the current year is slowing economic growth on a global scale, as a consequence of the mortgage market credit crisis in the USA. The second risk is the oil price increases.

Mr Wyżnikowski claims that an urgent task is to reform the system for support of the infrastructure. - We have to focus our efforts on the Euro 2012. However, I would rather suggest not going down the road of speculative measures which give entrepreneurs connected to EURO 2012 a green light, allowing them to rapidly carry out measures; but by introducing broad changes - deregulating the whole system. This would bring benefits to the whole economy. - the IBnGR vice president argued.

In Bartkowski’s opinion, 2008 will be a period of preparation for further reforms. Also he predicts an improvement in the business climate, which will influence investments, both nationally and internationally.

Source: Nowy Przemysł

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DID YOU KNOW?

The top places are taken up by wealthy countries with free market economies. Apart from the aforementioned Iceland and Norway, the top five is made up of Australia, Canada and Ireland. The USA caused a surprise as they fell from last year’s 8^th position to 12^th this year and Great Britain which took 16^th place. Compared to the European countries, Poland was ranked above Slovakia, Estonia, Lithuania, Croatia, Hungary, Greece and Malta.

According to the report 22 countries - all from Africa and south of the Sahara - qualified in the category of “low social development”. In the majority of countries, including Brazil, China, and India, the level of social development has increased in the last 30 years. However there are 16 countries in which the level of HDI is lower than in 1990. Whereas the Congo, Zambia and Zimbabwe all have indicators lower than in 1975.

The HDI is an indicator published with an annual report on the social development in 166 countries through the United Nations Development Programme (UNDP). This year’s report is titled: “Against climate change: solidarity in a divided world”.

The HDI indicator is an estimated assessment of the rate of social development, based on expected life expectancy, education and income resulting from data received from the UN and its partners.

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