Poland’s economic slump is over – that’s the word from Donald Tusk on Tuesday at an annual economic forum in the Polish mountain resort town of Krynica, announcing the start of an economic rebound that may also bolster the Polish premier’s sagging political fortunes.
“I have bad news for the pessimists. There will be no stagnation and no recession,” a confident Tusk told the politicians, businessmen, think tank types and lobbyists who rub shoulders at the forum.
He predicted that Poland’s economy could be growing as quickly as 2 per cent by the last quarter of this year and that growth for the year could come to 1.5 per cent – more than the World Bank’s estimate of 1 per cent. By early 2014, Tusk said the economy could be growing at more than 3 per cent.
Tusk isn’t just blowing hot air. Recent data releases on industrial production, retail sales, employment and economic sentiment all seem to show that the worst has passed for the Polish economy. The bottom came in the first quarter, when the economy grew by an anaemic 0.5 per cent.
Tusk is not the only optimist. Capital Economics, a research company with a decidedly bearish cast, came out with a rosy analysis of the Polish economy. This from William Jackson, emerging markets economist:
The severity of the slowdown in the Polish economy over the past 18 months took commentators and policymakers by surprise. The good news is that the slowdown appears to have been largely cyclical in nature and that most of Poland’s previous drivers of growth now seem to be strengthening, albeit gradually. Poland is unlikely to return to the growth rates of 6% or so seen in the 2006/07 boom years, but growth rates of 4% a year would be perfectly attainable.
Tusk also reached out to business, a constituency that his Civic Platform party has often taken for granted but which has grown increasingly disgruntled with the government’s lack of reforms and lackadaisical attitude towards the private sector.
He called for a “new plan” to spur growth and promised to simplify the tax system and to make life easier for businesses, while taking care to thank entrepreneurs for doing most of the work in helping Poland navigate the economic crisis.
That message is likely to be even more positively received by business in light of an interview with opposition leader Jaroslaw Kaczynski in the Rzeczpospolita newspaper.
In the interview, to be published on Wednesday, Kaczynski denounced business for exploiting workers, who he compared to “feudal peasants”, and called for the state to “forcibly increase wages”, threatening steep tax increases.
Kaczynski has managed to avoid committing any blunders in recent months as his Law and Justice party surged past Civic Platform in opinion polls, largely on the strength of public disenchantment with the sputtering economy.
But any economic revival coupled with the revelation of the true depth of Kaczynski’s disdain for business is likely to bolster Tusk’s hopes for a political recovery before parliamentary and presidential elections in 2015.