NEWS

Growth of over 80% has placed Poland in fifth place in the ranking. Turkey is in first place, having increased the energy generated by wind turbines by 220% last year. In second place was China with 127% growth; third was the Czech Rep. with 105% and New Zealand were fourth on 88%.

Countries such as France, Sweden, Italy, Finland and Canada were all lower down on the list and the top twenty was completed by Japan which increased its output by 17%.  

However, of 74 countries in the world rankings for wind generated electricity according to the power output, Poland is in 24^th place. Our turbines are able to generate 276 MW of energy.

Wind farm near Dar³owo.

Worldwide the country producing the largest amount of wind powered energy is Germany, whose turbines generate 22247MW. Poland exceeds most of the older EU nations.

The power generated by the Czech Rep.’s wind turbines is 116MW less than Poland’s. The Czech Rep. is in 28^th place in the world rankings; Bulgaria is 33^rd; Hungary 35^th; Estonia 37^th; Lithuania 38^th; Latvia 41^st; Rumania 54^th and Slovakia are in 56^th position.

The WWEA reports that worldwide in 2007 the wind generating power stations built produce almost 20 GW of power, an increase of 26% in global power. Wind power satisfies 1.3% of the world’s demand for electrical energy. The rapid development of this sector has led to estimates for energy production in the sector of 170GW by 2010. (PAP)

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During a debate organised by the Polish Chamber of Commerce (KIG), Mr Gomu³ka stated that the main goal of the government was to increase employment by 2.5 million people, i.e. by 10%. The Government hopes that 1 million people above the age of 50 will take up work and the special “50+” programme is being prepared for them.

Mr Gomu³ka has stated that the Government intends to raise its share of investment in GDP, from 20% to 30% in the long term. In the next few years the share of government investment in GDP should be between 23% and 25%.

In his opinion the improvement in public finances should depend on the reform of taxation and spending. - We’re moving in the direction of simplifying the VAT levy, decreasing PIT and in time CIT - he said. He also emphasised that the Government’s activities are focused on reducing the budgetary deficit, which will hasten our entry into the Euro Zone.

Another participant in the debate was the deputy economics minister Mr Adam Szejnfeld. He announced that the Government has begun inter-ministry consultations on a project for the paying of taxes by businessmen in EUR, or in another currency of their choice. Firms would be able to settle up in the currency they choose. This isn’t a 10 % solution of the problem of currency differences, but will allow these differences to be minimalised - he said.

Mr Szejnfeld also announced the beginning of work to lessen the burden of administrative costs by 25%, to 2010 and to enable the registration of firms via the internet, i.e. the introduction of what he calls the “zero barrier”. At the moments the tasks of institutions controlling businesses are being examined, to discover whether all of them are necessary. The Ministry is also evaluating the consolidation of various institutions to decrease the amount of regulation. (PAP)

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They also renewed their foreign currency rating to "A-/A-2" and "A/A-1" for the national currency under stable market conditions.

However, the Agency hasn’t discounted the possibility of changing the rating later in the year, though it’s more likely that this will occur in 2009 and that on condition that fiscal policy produces positive results. - The positive perspectives are due to the improved financial state and structural reforms under new governments - the agency’s analyst Mr Kai Stukenbrock explained in his commentary.

According to the economists of ABN Amro, this should lead to further limits of the deficit and strengthen Poland’s perspectives for entry into the Euro Zone.

The raising of the perspectives rating to positive signifies the probability of Poland achieving a higher position in the ratings’ next edition. Furthermore, S&P expects further fiscal consolidation, an increase in the labour market’s elasticity and more rapid privatisation.  (PAP)

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INVESTMENTS IN POLAND

The contract relates to the Sokó³, SW-4 and Kania models. The ¦widnik plant hasn’t disclosed the value of the contract. "Rzeczpospolita", which first reported the agreement, has estimated its value to be in the region of half a billion USD. A single model the Sokó³, in its basic version costs 5 million dollars.

According to Mr Mazur, it’s still too early to specify the value of the agreement. - It’s the framework for an agreement. The specifics of when, how many and what kind of helicopters will be built will be confirmed under annual agreements. We don’t want to get carried away by hurrahoptimism, we will provide details when we receive the initial deposit - Mr Mazur said. He added that the first orders are expected before the end of the year. 

The ¦widnik plant is to send ready made helicopters, together with parts for the assembly of the Sokó³ helicopters to China. - The Jiujiang Aviation Plant, who are our partners have already laid the foundation stone for the construction of their own helicopter assembly plant in China - he added.

The ¦widnik works manufacture helicopters and elements for the production of aeroplanes. They cooperate with many aviation companies across the world and employ 3,900 people. Last year they received revenues totalling 330 million PLN and their profits are expected to be 2 million PLN.

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Flextronics Logistics will provide DELL with advanced logistics services: they will acquire components for the firm, check them out and supply them to the plant - said Mr Marek Cie¶lak, the £SEZ president. The company also services office machinery and computers, it deals with accounts and bookkeeping, research and technical analysis, together with the running of call centres.

The investment will be located in £ód¼ and will open shortly, because the firm will utilise a site in which a hall was built recently. This is the company’s second branch in Poland and DELL’s partners already have a production facility for electronics and mechanical construction in Tczew, where they currently employ 3 thousand workers.

Flextronics Logistics Poland Sp. z o.o. is an American firm, which is part of the Flextronics group business; this is mainly comprised of firms operating in the advanced technology sector. Among other things they specialise in the broadly defined category of manufacturing services in the electronics sector.

Flextronics Logistics is the fifth firm to enter the £SEZ this year. In March the Zone is to issue another two permits. (£SSE/PB)

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• The increase in consumption is a sign of a healthy economy

  The value of retail sales in January grew by 21%. This means that consumers are not only fuelling economic growth but also inflation.  
  
  This result exceeded the most optimistic forecasts. The economists expected retail sales to be 15-16% higher than last year; whereas they increased by 21%. Though this higher figure is partly due to higher inflation, even so it is a very good signal. - This confirms the forecasts that consumption could rise faster this year than last year - said Mr Grzegorz Ogonek, an ING economist.
  
  These aforementioned figures simply confirm that at the beginning of 2008 a good economic performance is being maintained. Last week the Central Statistical Office (GUS) stated that industrial production in January grew by 10.8% year on year, and pay by 11.5%.
  
  It’s a fact that Poles eagerly buy luxury goods and not just the basic items. In January new car sales increased by 42%, when compared to last year; whereas sales in the categories of radio and TV equipment, domestic appliances and furniture were up by 21%. Ms Monika Kurtek, an economist from BPH, stressed that clearance sales had a large impact on businesses’ turnover. - The effect of clearance sales will also be noticed in February, though at a lower rate, whilst in March sales will increase due to the Easter holidays falling in this period - Ms Kurtek said.
  
  However, the most important factor fuelling demand is the improvement in the situation of the labour market. The Survey of Economic Activity of the Population (BAEL) showed that in the IV Q of 2007, Poland’s unemployment fell to 8.5% (Eurostat figures give 8.1%). Though the so called unemployment register was 11.7% in January, this record included people who were signing on in labour exchanges, but also in work. Poles are also steadily earning more money. The pay is increasing and also since January the national insurance payments of every employee was reduced by 3 points. From March of this year 9.7 million people will receive reassessed insurance and pension payments. (RZ)

• 5% growth in GDP in I quarter

  The forecasts of the experts place the increase in GDP over I Q at 5%. The condition is the maintenance of a high level of retail sales.
  
  - Consumer demand this year will be a very important force for the growth in GDP, e.g. relating to the situation on the labour market - the economists from BZ WBK estimated. The experts when asked by “Gazeta Prawna”, said that the GDP increase would be 5% for I Q 2008, as against 7.2% for I Q last year.
  
  - Earlier I expected 4.5%; however, the improved economic climate means that I now expect 5%. The scale of the downturn in investments will also be lower, than it was thought - said Mr Piotr Kalisz, an economist from Citi Handlowy.
  
  This opinion was supported by Ms Halina Dmochowska, the Vice President of GUS: - The tempo of growth of GDP in I Q should be fairly good. Nothing dramatic occurred, to lead to a drastic slowdown. The economy is developing at a good, healthy rate, but let’s not forget that we had a good foundation last year - she said.

   

• Exchange rates (as of 28.02.2008):

	Buy	Sell
USD	2.3150	2.3618
EUR	3.4942	3.5648

Source: www.nbp.pl

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FROM THE REGIONS

On 26^th and 27^th February 2008 the ³ódzkie voivodship hosted representatives of 27 different Japanese firms and institutions. The purpose of the event was to show the Japanese delegation the current economic situation in Poland, together with the voivodship’s investment offers. The businessmen met the local authorities from the region’s largest towns and also had the opportunity to view some chosen sites designated for investment.

Among the main points of the program were presentations prepared by various local authorities (by: the SEZ itself, the whole voivodship, £ód¼ and Kutno), visits to sites belonging to the SEZ (the Radomsko and Kutno sub-zones) and also visits to manufacturing plants based in the region.

The 30 delegates that came to Poland were mainly from businesses already operating in various European countries, including Germany, England, Belgium, Holland, the Czech Rep. and Hungary and also from Japan. These represented sectors: production, trade, logistics, building and construction, telecommunications, finance and bookkeeping and finally law.

Support to organizers was also given by various local authorities - the ³ódzkie Voivodship Marshall’s Office, the City of £ód¼’s Bureau, the Radomsko Town Bureau and the Kutno Town Bureau. (£SEZ)

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ANALYSES AND REPORTS

According to GUS, 15.5 million people are at work in Poland (figures to Dec. 2007). This is over 2 million more than before Poland entered the EU in 2004. Only once in the history of these statistics (in August 1998), have the numbers of those employed reached this level.

- Such an improvement is an unprecedented occurrence - said Mr Jan Rutkowski, the chief economist for the Central European region of the World Bank. In his opinion nowhere in the world has unemployment fallen so significantly, over such a short period of time.

Jobs are emerging in the most sought after sectors of the modern economy. In the services 8.51 million people work presently and in industry the figure is 4.86 million. Four years ago the statistics were 7.35 and 3.83 millions respectively. Thus, in these two sectors companies have created over 2.19 million jobs in this period. The numbers employed in agriculture is falling.

The improving situation in the employment market is causing an increase in the employment indicators. As Prof Elæbieta Kryńska, of £ód¼ University explains, this illustrates the situation on the employment market, rather than the unemployment indicators.

- The level of unemployment often depends on the legislator, as he can so define an unemployed person, that although he is without work he isn’t added to the unemployed - she said.

GUS state that the employment indicator for the ages 15-64 (this indicator according to the Lisbon Strategy should reach 70% by 2010) in IV Q 2007 was 58%. Though this is 7 percentage points higher than in 2004, it’s still low. The EU average is over 65%.

The lower employment indicator in Poland is mainly the effect of the low number of people working above the age of 45, but below retirement age. Currently only 56% of them are at work.

The GUS figures show that for the first time since 1998 the numbers of people working on time limited contracts has been reduced. Of the 12 million people employed full time, 3.4 million work under contracts subject to time limits (28.3% of those in employment). 

Mr Julian Zawistowski, Vice President of the Institute for Structural Research, has noticed that the change in this trend shows how employees’ situations have improved. Workers have greater power to influence their bosses and to gain unlimited contracts from them. He added that this also testifies to the lower numbers available on the labour market. Fewer people are sacked, as a result of which they work for longer periods, with their limited contracts being changed to unlimited ones.

The experts agree that such the dramatic improvement won’t be repeated. Mr Zawistowski, believes that the country will shortly reach a position of stability.

According to the experts to avoid a recession caused by shortages of labour, it’s essential to activate people who are able to work. This mainly concerns people who are under retirement age. Further improvements in the labour market may also be caused by a slowdown in the world’s economy and a fall in the demand for goods and services, which are made and provided by Polish firms. However, if the economic development remains relatively stable and the government undertakes the activation of people of productive age, the situation may improve.

In December 2007 the unemployment indicator (according to Eurostat) for the 27 EU countries was 6.8% and 16.2 million people remain unemployed. The lowest levels of unemployment are in Holland, Denmark, Cyprus and Lithuania; which don’t exceed 4%, whereas in Holland it’s only 2.9%; the highest recorded unemployment was in Slovakia. In Poland the unemployment figure is - 8.1% - close to that of the EU average. In December, for the first time since May 2004, Poland has overtaken not only Slovakia, but also other EU countries; there is higher unemployment in Spain - 8.6%, Portugal - 8.2% and Greece - 8.2%.

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