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Poland economy is slowing down - how does it affect you?


pawian 161 | 9,846
25 Sep 2012  #1
Experts are warning that Polish economy is losing its impetus which so far has made Poland a green island in recession-stricken Europe.

November 2009

s

It seems the global crisis which has evaded us so far is knocking on the door.

Poles have become very careful with the money they spend. I can see it in my clients who, to my surprise, turned into stubborn negotiators. It has never happened in my long teaching career. I am seriously considering lowering my prices in order to keep the amount of classes I have had so far.

PS. BTW, any idea how much does a maid in a 5-star hotel in Krakow make from basic salary and tips? I am negotiating a contract with a group of maids and neither would like to screw them nor be screwed myself.

wbj.pl/article-60170-polish-economy-slowing-down.html

Polish GDP grew by 2.4 percent in Q2 of 2012, accordign to figures released on Thursday by Poland's Central Statistics Office. The Ministry of Economy had forecasted a growth of 2.9 percent in Q2 of 2012. Marek Belka, the head of the National Bank of Poland had also recently predicted Q2 GDP growth at roughly 3 percent. The Polish economy grew 4.3 percent in 2011 before slowing to 3.5 percent y/y in Q1 2012.

polstock.pl/headline_details/polish_economy_slows_in_q2_to_ below_expectation_24_annual_rate/en/613

Poland's economy disappointed in the second quarter, slowing to a below-expectation 2.4% annual growth rate with domestic drivers nearly absent despite the Q2 culmination of Poland's Euro2012 preparations. Finance Minister Jacek Rostowski admitted the figures are "disappointing," but dared venture that Q3 growth will not slow down any further. A senior official at the Central Statistical Office (GUS), however, openly expressed fears that growth rates will fall further in Q3 and Q4.

newsroom.nordeamarkets.com/en/2012/08/30/poland-bitterly-disappoi nting-gdp-figures/

GDP growth in Q2 proved much weaker than expected, slowing down to 2.4% y/y from 3.5% in Q1 (our forecast was 2.8% and market consensus 2.9%). Domestic demand dropped 0.2% y/y after 2.7% rise in Q1. A part of this is due to destocking (change in inventories had negative contribution of 1.5%-point in Q2 after positive contribution of 0.8%-point in Q1), which is unlikely to be continued on a large scale in next quarters. However, key components of domestic demand bitterly disappointed, indicating that underlying trend in economic activity is weaker than expected.
milky 13 | 1,657
25 Sep 2012  #2
An economy dependent on emigration,grants,and billions from Poles abroad, is obviously a house of cards.
Zibi - | 336
26 Sep 2012  #3
On the contrary, that's precisely why it has been a "green" island for the past few years.
Grzegorz_ 51 | 6,163
26 Sep 2012  #4
how does it affect you?

Personally not at all but quite a few people I know lost their jobs in last few weeks.

On the contrary, that's precisely why it has been a "green" island for the past few years.

True but that can't go on forever, especially when the only important decisions of the gov regarding economy is raising the taxes.
Zibi - | 336
26 Sep 2012  #5
is raising the taxes

Yes, you are right, we all dread PIS coming to power.
Grzegorz_ 51 | 6,163
26 Sep 2012  #6
So you enjoy higher taxes only because they were rised by non-PiS :))) ?
OP pawian 161 | 9,846
26 Sep 2012  #7
True but that can't go on forever, especially when the only important decisions of the gov regarding economy is raising the taxes.

Do you suggest that by lowering taxes they would be able to kick the economy into a higher gear?
Meathead 5 | 470
26 Sep 2012  #8
By paying higher wages would kick the economy in a higher gear. Henry Ford, "I pay my employees enough money so that they will be able to afford to buy my car"
legend 3 | 664
26 Sep 2012  #9
Close the borders, leave the EU, bring all soldiers home (if app).

Start to improve relationships with Eastern Europeans (Slavs, Magyars, Romanians, Baltics, etc) and
not the West which goes from one "terrorist" "evil" nation to another bombing innocent people for reasons like "democracy".
Zibi - | 336
26 Sep 2012  #10
Start to improve relationships with Eastern Europeans (Slavs, Magyars, Romanians, Baltics, etc) and
not the West which goes from one "terrorist" "evil" nation to another bombing innocent people for reasons like "democracy"

Welcome to our Forum, we have not seen a Moscow agent here lately, thank God Mr. Putin has paid you now.
OP pawian 161 | 9,846
26 Sep 2012  #11
By paying higher wages would kick the economy in a higher gear.

And in hyper inflation, too. :):):)
pip 10 | 1,661
26 Sep 2012  #12
It hasn't affected us at all. In fact my business is doing exceptionally well and my husband is having his best year yet.
Personally, I think the wages need to be higher- but having said that- I put my money where my mouth is. I have a student that works for me and I pay him 3 pln more than the average wage per hour part time. I think it is 7 pln per hour and I pay 10.

The need to fix the tax system here. Mostly property taxes and school taxes and things like that. I don't think income tax is too outrageous--but our property taxes are so low it is stupid. I will happily pay more property taxes if our roads and infrastructure are repaired.

If there is a slowdown- I don't see it.
Grzegorz_ 51 | 6,163
26 Sep 2012  #13
Do you suggest that by lowering taxes they would be able to kick the economy into a higher gear?

Yes, I do.
OP pawian 161 | 9,846
26 Sep 2012  #14
Yes, but lowering taxes usually takes positive effect after a few years while the government needs money NOW.

It hasn't affected us at all. In fact my business is doing exceptionally well and my husband is having his best year yet.

That`s good. Hopefully, it will always be like that.
pip 10 | 1,661
26 Sep 2012  #15
pip: It hasn't affected us at all. In fact my business is doing exceptionally well and my husband is having his best year yet.

That`s good. Hopefully, it will always be like that.

sorry- I should clarify, I sound quite obnoxious. My husband works in commercial real estate--foreign investors are still investing and taking space here in droves.
OP pawian 161 | 9,846
26 Sep 2012  #16
foreign investors are still investing and taking space here in droves.

You mean buying, developing or renting?
pip 10 | 1,661
26 Sep 2012  #17
everything
OP pawian 161 | 9,846
26 Sep 2012  #18
Oh, I see.
milky 13 | 1,657
26 Sep 2012  #19
exactly
OP pawian 161 | 9,846
26 Sep 2012  #20
milky is on your ignore list. [+]

What do you mean?

blogs.wsj.com/emergingeurope/2012/08/30/slowing-polish-economy-puts-pressure-on-central-bank-to-act/

WARSAW-Poland's economy is decelerating at a faster pace than expected due to both external and domestic factors, increasing pressure on the central bank to ease monetary policy a few months after it raised borrowing costs.

Weak second-quarter growth-that slowed to the lowest level since the third quarter of 2009-dashed the hopes of the European Union's largest economy of defying ongoing global economic turmoil.

According to Poland's national statistics office, gross domestic product expanded 2.4% in the second quarter, lower than the expectations of the central bank, the economy ministry and analysts, who had forecast 2.9% growth.

Of all the economies in the European Union, Poland's was the only one to avoid a recession in the wake of the global financial crisis in 2008-2009, and was one of the fastest-growing since then, showing surprising resilience to the most recent troubles of its main trading partner, the euro zone. However, these headwinds appear now to be affecting the Polish economy and the slowdown can't be pinned solely on external factors, with private consumption and investments both slowing in the second quarter, and domestic demand contracting.


[......]
milky 13 | 1,657
27 Sep 2012  #21
Well, Donald did say he wanted an economy like Ireland's, and,it looks like he didn't renege on this one. Easy policy, of do nothing to upset the markets and the tiny minority than run them.
InWroclaw 89 | 1,915
27 Sep 2012  #22
Have you recently purchased a flat or property, btw?
pip 10 | 1,661
27 Sep 2012  #23
Oh, I see.

oh please. I am not a capitalist pig- no matter how some idiots try and portray me as such. There is nothing wrong with working hard and being successful.

But it seemed as though the point was missed. My husband deals with foreign companies every day.--they are still investing in everything. buying buildings- warsaw trade tower is up for sale- currently owned by a pension fund- they will sell it to something similar and make money from it. that is what happens in big business.

he leases space- he leases to primarily foreign companies that are still investing here. To foreigners- Poland is still the best option because of the skilled workers and cheap labour.

Apartments, even though they have slowed in construction, are still being built and sold- anybody that says otherwise is smoking crack.

go for a walk in downtown Warsaw--the core is still underdeveloped. I have posted and so have others, posted documents to support this- for a city the size of warsaw it has a massively underdeveloped office market- therefore, developers are still developing.

Skanska is widely successful- their current developments are all being built "green"--which attracts a certain client.

so if all these foreign companies are still investing in Poland then they hire locally. Even with a starting salary of 3,800pln per month it is still a good income from somebody just out of school.

So has the economy slowed--probably- but people are still being hired and people are still buying.

and perhaps those that thing I am a Capitalist pig should probably get their hands out of their pants and off their keyboards and strive for better. There is nothing wrong with being successful. And in case you didn't notice---Poles WANT to be successful and be proud. stop dragging the country down with neo communist bullshiit.
OP pawian 161 | 9,846
27 Sep 2012  #24
oh please. I am not a capitalist pig- no matter how some idiots try and portray me as such. There is nothing wrong with working hard and being successful.

Of course.

Forgive me that joke with the old communist poster. Of course, we have nothing against hard work and being successful. Good luck!
pantsless 1 | 267
28 Sep 2012  #25
All very general sounding, but it's here. I see it with the things I buy and sell (or the difficulties in selling). I see many people have had their salaries cut. A few people have lost their jobs, or have been looking to switch their job... no dice. A company I work with is closing down, not enough work. Two companies haven't paid me in over 60 days. I'm sure in Warsaw the situation looks much better, but the exact time frame of events right now do not look good.

By paying higher wages would kick the economy in a higher gear.

Yea, nobody disagrees with that. But how would lowering taxes make that happen?
delphiandomine 83 | 17,653
28 Sep 2012  #26
I see many people have had their salaries cut.

No harm in that - in fact, it's generally known that a labour force willing to take paycuts when times are bad (and payrises when times are good) will succeed much more than the Greek version where no-one saw cuts in their salaries until it really was too late.
pantsless 1 | 267
28 Sep 2012  #27
Ha ha... heh.

These were 30-40% paycuts Delph. Some of them now have massive problems paying off their mortgages, late payments are the norm. Everyone is borrowing money, selling off things, cutting costs even more. Of course management and partners/owners had no paycuts though, just the opposite. All its done is left a bitter taste in everyone's mouth. One guy resorted to stealing office supplies to save money and as a bit of revenge. This was someone who wouldnt cross the street at a red light.
delphiandomine 83 | 17,653
28 Sep 2012  #28
These were 30-40% paycuts Delph.

Better to take a paycut and have a job than to refuse paycuts and end up unemployed, right? Germany has followed the same model and it has protected much of their workforce as a result - they know and understand that short term pain equals long term gain.

Some of them now have massive problems paying off their mortgages, late payments are the norm.

I do wonder what kind of mortgages they were taking if they have "massive problems" as a result of a 30% paycut. One would suggest that their financial planning hasn't been particularly sound - either they were living way beyond their means, or they are still spending much more than they need to.

Everyone is borrowing money, selling off things, cutting costs even more.

Are they? That's certainly not what I'm seeing here. Either you're associating with people who were massively living beyond their means, or it's simply not true.

Of course management and partners/owners had no paycuts though, just the opposite.

I'm pretty certain you won't be able to provide empirical evidence for this, just "word on the street".

One guy resorted to stealing office supplies to save money and as a bit of revenge. This was someone who wouldnt cross the street at a red light.

Revenge for what?

I think you must hang out with some pretty strange people if they're taking 30% paycuts in a society where they aren't the norm at all. I've heard of exactly one industry cutting their wages - the EFL industry, and that's because there is such intense competition on the market.

If you told me that people were taking 10% paycuts, I'd believe you - because that's what has generally happened in Germany. But 30-40%? Not believable.

Anyway, I've just made a few searches online and can find absolutely no mention of such massive paycuts in Poland. I've looked in the Polish media (both pro and anti Government), I've had a look in respectable newspapers - nowhere is such a scenario mentioned. There's some talk of pay being frozen, but that's about it. The story you tell of 30-40% paycuts seems to be just that - a story.
f stop 25 | 2,513
28 Sep 2012  #29
Why the US unemployment, at 8 %, is all doom and gloom, while Poland, at 12% unemployment rate is a toast of Europe?
delphiandomine 83 | 17,653
28 Sep 2012  #30
Because in Poland, that 12% aren't much of a burden. Many of them are also only technically unemployed - they will be unemployed to get their healthcare provided, but in reality, they'll be working in some way. The black market is absolutely huge here - it's quite normal to hand over cash for a service and not to get a receipt. If they are genuinely unemployed, they'll probably live with their families and not really represent any trouble to society. Essentially, the unemployed are pretty much forced to find some sort of employment - legal or otherwise.

And 12% isn't that much by European terms - the 25% in Spain (with a giant welfare bill to match) is much more damaging.


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