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Will Poland be badly hit by Recession ? I don't think so.


LwowskaKrakow 28 | 431
25 Oct 2011  #1
As Europe and especially the Euro zone is heading towards Recession in the next couple of months ,i thought i might share my impression that Poland will not be hit as badly as the other countries in Europe.

Why?

1) Poland was the only European country to show economic growth in the past 4 years since the financial crisis in 2008
2) Every week we hear that new international Businesses are outsourcing in Poland or setting up a base ( for instance Samsung and LG are opening new plants soon)

3) Even if Poland does have some Public deficit it does not borrow on the markets as much as France, Italy ,Spain,etc
4) Poland is out of the Euro zone and thus will have more monetary freedom (devaluate or adapt the PLN)

Moody's might lower Poland 's rating if Tusk does not restrict public spending but not beeing able to borrow too much may be good to avoid getting huge debts passed on future Polish generations.

So all in all I bet that Poland will not be in such a catastrophic state as the others.

What do you think?
Ziemowit 12 | 3,492
25 Oct 2011  #2
The outbreak of the critical phase of the crisis in the eurozone will affect Poland greatly, there is no doubt about it. And the eurozone has no clear idea how to solve its debt crisis. Notice that the eurozone's debt continues to grow, while the increase of the US debt has already been stopped. All in all, the prospects for Europe are much more gloomier than for the States which in contrast to Europe is a unitary economic entity. The leadership of the EU is very weak and unimaginative, either is the leadership of Poland. Do you recall the European Commission's fairly recent boasting about their plans for Europe to soon become the most advanced area in the world in terms of science and modern technology? Now they can only boast about being the most advanced area in the world in terms of public and private debt. What a shame for all of us living in the European Union.
peterweg 36 | 2,316
25 Oct 2011  #3
What do you think?

We will find out soon.
southern 75 | 7,097
25 Oct 2011  #4
Poland is not hit by economic crisis because Poles abroad have hard hit by it.In personal level crisis is quite felt several of my Polki here gravitate to the (semi-)prostitution path and tell me of many who leave to other countries.
pawian 159 | 9,552
25 Oct 2011  #5
Will Poland be badly hit by Recession ? I don't think so

I am also an optimist. I believe that Poles will manage to keep up good work. After all, they are able to live a normal life today. Something unusual in the past 300 years of our country`s history.

They are good times, despite the crisis etc.
pip 10 | 1,661
25 Oct 2011  #6
Slightly. What is interesting is my husband works in commercial real estate and he has done many deals this year from American companies and German, among others. It seems as though the countries that were hit hardest by the recession are still investing abroad- but not in their home countries.

I think Poland will not have too much to worry about.
irenamala - | 2
25 Oct 2011  #7
PiS didn't win so anything can happen :)
pawian 159 | 9,552
25 Oct 2011  #8
If PiS had won, I would be a pessimist. :):):):)
OP LwowskaKrakow 28 | 431
26 Oct 2011  #9
I think Poland will not have too much to worry about.

I agree .What'smore the Compsumption sector is far from beeing saturated in Poland and there are still a lot of businesses and home services which should appear in the future :Mexican restaurants,cleaning services companies,nannies companies to name a few .

Compared with Germany France Italy ,taxes in Poland are smaller , rentals are cheap,people have a bigger purchasing power* and they spend more which explains all those luxurious and gigantic shopping malls everywhere in the country, cafes,etc.

*For instance in Krakow a huge percentage of the population lives in subzidized flats or council houses in the district Nowa Huta but for a total population of about 800 000 people Krakow has at least 3 big shopping malls and thousands of shops.

Of course poverty still exists and some people are struggling too in parts of Poland which has no economic boom but all in all Poland will be ok.
Wedle 16 | 496
26 Oct 2011  #10
2) Every week we hear that new international Businesses are outsourcing in Poland or setting up a base ( for instance Samsung and LG are opening new plants soon)

This is also what was happening in Ireland.

Moody's might lower Poland 's rating if Tusk does not restrict public spending but not beeing able to borrow too much may be good to avoid getting huge debts passed on future Polish generations.

The rock and the hard stone for PO/Tusk is how to appease both EU and Poles with the forth coming austerity measures. Higher unemployment and more business's failures in favor of Maastricht treaty.Furthermore if there is a significant slow down, within EU proper, it will effect the Poles working overseas, therefore less funds being repatriated.
wielki pan 2 | 250
26 Oct 2011  #11
Of course poverty still exists and some people are struggling too in parts of Poland which has no economic boom but all in all Poland will be ok

Love to say your right but in every recession every country will suffer, for Poland well...the poor for number 1, unemployment, prices like real estate will go down... less business activity, work out the rest... A lot of foreign companies are moving to Poland.. I hazard a quess and say cheap labour is one of the reasons.. Governments will have less money and would have cutbacks in spending...I would hate to know how much debt Poland has, especially to the EU...
Wedle 16 | 496
26 Oct 2011  #12
Krakow has at least 3 big shopping malls

I know of at least four and I don't know the city that well.
OP LwowskaKrakow 28 | 431
26 Oct 2011  #13
I hazard a quess and say cheap labour is one of the reasons..

Cheaper labour rather than cheap labour but it is not the only reason because Modlavia Romania Bulgaria have even cheaper labour costs.

High skills, high education, good will at work , very little strikes , flexible schedule etc make Poland a very safe place for international companies to outsource.
wielki pan 2 | 250
26 Oct 2011  #14
because Modlavia Romania Bulgaria have even cheaper labour costs.

poland is more stable than those countries, in time that will change.
OP LwowskaKrakow 28 | 431
26 Oct 2011  #15
This is also what was happening in Ireland.

We should start a thread comparing Ireland and Poland since there may be some similarities.

However it is a public secret that Ireland the Celtic Tiger had a steady and good growth but lost its mind at some points with failing to issue regulations( Real Estate, banks lending etc) not to mention that Irish salaries 2 or 3 years ago were totally inflated : for instance a salary over 70 000 euros a year for a public librarian!
wielki pan 2 | 250
26 Oct 2011  #16
[quote=LwowskaKrakow]70 000 euros a year for a public librarian!

please provide the facts
southern 75 | 7,097
26 Oct 2011  #17
You have to see what Poland exports that maybe of interest for other countries.The rest is just thin air the Germans provide now to get it multipied back in the next decades.
FUZZYWICKETS 8 | 1,884
26 Oct 2011  #18
have we not discussed this topic ad nauseum?

just reconsider what your 1-4 would be without the bazillions of euros Poland has received over the last few years from daddy European Union. you know, exactly what 1000 other people have already said on this forum.
southern 75 | 7,097
26 Oct 2011  #19
What steers developments is how Germany views Poland and slavic countries in the East in general.Now the problem are the PIIGs when they finish with the PIIGs they will get down to the rest of bills as well.
peterweg 36 | 2,316
26 Oct 2011  #20
You have to see what Poland exports that maybe of interest for other countries.The rest is just thin air the Germans provide now to get it multipied back in the next decades.

Exports:

$162.3 billion (2010 est.)

$142.1 billion (2009 est.)

Exports - commodities:
machinery and transport equipment 37.8%, intermediate manufactured goods 23.7%, miscellaneous manufactured goods 17.1%, food and live animals 7.6%

Exports - partners:
Germany 26.9%, France 7.1%, UK 6.4%, Italy 6.3%, Czech Republic 6.2%, Netherlands 4.3%, Russia 4.1% (2010)

cia.gov/library/publications/the-world-factbook/geos/pl.html
stat.gov.pl/gus/5840_970_ENG_HTML.htm
southern 75 | 7,097
26 Oct 2011  #21
162 billion exports in a population of 38 million while Germany has 1.2 trillion exports for 82 million people.This means that the living standard in Poland would have to be 15% of that of Germany if there were no outflows from the latter.But the Germans will get their money back one way or another.
Wedle 16 | 496
26 Oct 2011  #22
$162.3 billion (2010 est.)

$142.1 billion (2009 est.)

Why not use the PLN as your base currency then there is no room for currency appreciation or depreciation.
peterweg 36 | 2,316
26 Oct 2011  #23
162 billion exports in a population of 38 million while Germany has 1.2 trillion exports for 82 million people.This means that the living standard in Poland would have to be 15% of that of Germany if there were no outflows from the latter.But the Germans will get their money back one way or another.

Yes, lets compare Poland against the world biggest exporter, that would be fair wouldn't it?. Poland's exports have grown 13.6% this year to August, up over 1500% (in nominal terms) since 1991. If you want to simplistic, in 9 years Polands PER CAPITA exports would match Germany's.

Why not use the PLN as your base currency then there is no room for currency appreciation or depreciation.

Read the link I already posted where its in PLN, USD and EUR. In dollar terms exports are up 21.7% year to August.

stat.gov.pl/gus/5840_970_ENG_HTML.htm

By those figures its going to be $197billion by year end 2011
southern 75 | 7,097
26 Oct 2011  #24
If you want to simplistic, in 9 years Polands PER CAPITA exports would match Germany's.

You commit the usual mistake of Achilles and the tortoise.Poland's exports will never reach Germany's.

en.wikipedia.org/wiki/Zeno%27s_paradoxes#Achilles_and_the_tortoise
pip 10 | 1,661
26 Oct 2011  #25
I don't think statistics yeah or nay the op. Poland is an enigma. You can do your best to predict what will happen but ultimately nobody knows. All of the other countries you are comparing don't have the same history as Poland. All of the big ticket items that Poles never had before are still being purchased, homes included. There is also a strong desire for foreign companies to invest still- they haven't saturated the market yet.
OP LwowskaKrakow 28 | 431
26 Oct 2011  #26
just reconsider what your 1-4 would be without the bazillions of euros Poland has received over the last few years from daddy European Union.

Ireland and other countries have received a lot too but the "return of the investment" (sorry for the expression) has been better in Poland because it is a market of 38 millions of consumers.

[quote=LwowskaKrakow]70 000 euros a year for a public librarian!

please provide the facts
Answer:

As for inflated salaries in Ireland there were so many articles about it : Here are some about the Public sector but the private sector also gave gigantic salaries before the big crash...

sbpost.ie/news/irish-public-sector-workers-among-worlds-highest-earners-50628.html
politics.ie/forum/economy/38595-david-mcwilliams-irish-public-sector-pay-eus-highest.html
Grzegorz_ 51 | 6,163
26 Oct 2011  #27
to avoid getting huge debts passed on future Polish generations.

Where have you been for the last 4 years. It's already happened.
Wedle 16 | 496
26 Oct 2011  #28
All of the big ticket items that Poles never had before are still being purchased,

I am not quite sure about that pip, the Poles have taken to credit like a duck takes to water, this is what is driving purchases.Warsaw is also the epicenter of Yuppies in Poland, " all flash no cash mostly " although I am not disputing there are some very wealthy Poles in Warsaw especially in Zoliborz. If you did an audit on the majority of people in Warsaw, I am convinced the credit to debit ratio would be above 60% now, if as some are suggesting the value of real estate goes down after Euro 2012 by 10-20% then we are up to 70/80%

There is also a strong desire for foreign companies to invest still- they haven't saturated the market yet.

This has been based on Poland being the only Oasis in Europe during the previous crisis, we have since found out that mistakes were made and the figures revised, so it was not as good as first reviewed. Further more most companies that are setting up shop in Poland now are looking at Eastern markets. It is not a foregone conclusion these markets will open up fully, it is still work in progress.

Crucial steps in overcoming the predicted slowdown in the Polish construction industry - October 2011

This autumn business confidence index in the Polish construction sector fell to a level previously seen in the spring of 2009. The sentiment among market participants was adversely affected by such factors as continued uncertainty in financial markets, most projects for Euro 2012 reaching completion, required cuts in public sector investment spending and the lack of clear signs of recovery in private investment. However, companies mention numerous factors facilitating doing business in the construction industry in Poland.

The results of a survey of high-level professionals from the management and operating divisions of 200 largest Polish construction companies, which was conducted for the purpose of the report “Construction sector in Poland H2 2011 – Comparative regional analysis and development forecasts for 2011-2014” show a sharp downturn in business sentiment in the construction industry in Poland. PMR Business Confidence Indicator for the construction industry had a value of -2.4 pts in September 2011, demonstrating that construction companies were significantly less optimistic as to the present and future situation in the sector after two years of relative stabilisation.

Poland faces economic slowdown: experts

Poland faces an economic slowdown in 2012 due to the deepening global crisis and much in this respect will depend on foreign markets, economic experts said Monday at a conference hosted by the Lewiatan employers confederation.

According to Lewiatan's observers, Poland's industrial sales were going down, as was foreign demand for Polish products and the inflow of foreign investment to the country.

They also warned that Poland's trade deficit was oscillating strongly and less and less companies were willing to take credit.
Avalon 4 | 1,068
4 Nov 2011  #29
You know you have made it when you are the only country that Germany will lend money too!!!!

FRANKFURT (Reuters) - Germany's second-largest lender Commerzbank (Other OTC: CRZBF.PK - news) will refuse loans which don't help Germany or Poland, as the euro zone crisis makes European banks more protectionist in choosing between writing new business and meeting stringent capital requirements.

I am suprised that they do not want to lend more to the Greeks.
peterweg 36 | 2,316
6 Nov 2011  #30
Germany or Poland,

this is very interesting. New Euro with Germany, France, Benelux and ...soon... Poland as members?


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