Download POLAND

POLAND
Economic Freedom Score
25
World Rank:
42
Regional Rank:
19
Least
free 0
oland’s economic freedom score is 68.6, making its econoPbetter
my the 42nd freest in the 2015 Index. Its score is 1.6 points
than last year, driven by improvements in half of the
50
75
Most
100 free
68.6
Freedom Trend
70
10 economic freedoms, especially freedom from corruption,
fiscal freedom, the management of government spending,
and monetary freedom. Poland is ranked 19th out of 43 countries in the Europe region, and its overall score is above the
world average.
69
68
67
Over the past five years, Poland’s economic freedom score
has advanced by 4.5 points, the largest improvement in the
region. Gains in eight of the 10 economic freedoms include
double-digit strides in financial freedom and freedom from
corruption. In the 2015 Index, Poland has recorded its highest
economic freedom score ever.
While Poland’s transition to a market-based economy has
accelerated, some structural foundations still need reinforcement. The labor market remains rigid, and business
regulations still lag behind standards in some Western and
Northern European countries. Enforcement of the rule of law
is hindered by delays in the court system. Membership in the
European Union helps to ease trade restrictions and attract
investment, and openness to capital contributes to a budding
financial sector.
BACKGROUND: Poland joined NATO in 1999 and the European Union in 2004. Prime Minister Donald Tusk of the
center-right Civic Platform party was re-elected in October
2011. In 2014, his government survived a vote of no confidence
after secret audio tapings of Foreign Minister Radek Sikorski
sparked a political scandal. With a flexible exchange rate, an
IMF credit line, access to international markets, and healthy
economic policies, Poland was the only country in Europe
to experience economic growth during the 2009 credit crisis. Low investment rates in agriculture have made Poland
uncompetitive in food production, but the automotive, pharmaceutical, aviation, steel, and machinery sectors have made
it one of the EU’s strongest economic performers. The private
sector now accounts for two-thirds of GDP.
How Do We Measure Economic Freedom?
See page 475 for an explanation of the methodology
or visit the Index Web site at heritage.org/index.
66
65
64
63
2011
2012
2013
2014
2015
Country Comparisons
68.6
Country
World
Average
60.4
Regional
Average
67.0
Free
Economies
84.6
0
20
40
60
80
100
Quick Facts
Population: 38.5 million
GDP (PPP): $817.5 billion
1.6% growth in 2013
5-year compound annual growth 2.7%
$21,214 per capita
Unemployment: 10.4%
Inflation (CPI): 0.9%
FDI Inflow: –$6.0 billion
Public Debt: 57.5% of GDP
2013 data unless otherwise noted.
Data compiled as of September 2014.
361
POLAND (continued)
THE TEN ECONOMIC FREEDOMS
Score
RULE OF
LAW
Country
World Average
Property Rights 60.0
Freedom from Corruption 60.0
0
20
40
60
80
Rank
1–Year
Change
41st
37th
0
+5.2
100
Slow progress in improving the transparency and accountability of public administration continues to hamper efforts to combat corruption. The legal system protects rights to acquire and
dispose of property, and the judiciary is independent, but the courts are notorious for delays
in adjudicating cases. Slow action on corruption investigations has prompted concerns that
prosecutors are subject to political pressure.
Fiscal Freedom 82.1
GOVERNMENT
Government Spending 47.1
SIZE
66th
137th
0
20
40
60
80
+6.0
+3.9
100
Poland’s top individual income tax rate is 32 percent, and its top corporate tax rate is 19 percent.
Other taxes include a value-added tax and a property tax. Overall tax revenue amounts to 20.1
percent of domestic income. Public expenditures equal 42 percent of domestic production, and
public debt is equivalent to 57 percent of gross domestic product.
REGULATORY
EFFICIENCY
Business Freedom 67.3
Labor Freedom 60.4
Monetary Freedom 81.3
81st
101st
35th
0
20
40
60
80
–2.8
0
+3.5
100
Despite measures to further streamline start-up procedures and facilitate private-sector
development, it still takes about a month to launch a business, although the cost of completing
licensing requirements is now significantly lower. Relatively stringent labor codes continue to
hinder job growth. The government plans to cut renewable energy subsidies by $780 million
in 2015 to reduce power costs.
OPEN
MARKETS
Trade Freedom 88.0
Investment Freedom 70.0
Financial Freedom 70.0
11th
47th
19th
0
20
40
60
80
+0.2
0
0
100
EU members have a 1.0 percent average tariff rate. Although some non-tariff barriers exist,
the EU is relatively open to external trade. Poland generally treats foreign and domestic investors equally under the law. The financial sector consists mainly of private banks, although
the government continues to retain some ownership in the banking sector. Capital markets
are expanding.
Long-Term Score Change (since 1995)
RULE OF LAW
Property Rights
Freedom from
Corruption
362
+10.0
+10.0
GOVERNMENT
SIZE
Fiscal Freedom
Government
Spending
+31.1
+37.5
REGULATORY
EFFICIENCY
OPEN MARKETS
Business Freedom
–2.7
Labor Freedom
+0.4
Monetary Freedom +32.6
Trade Freedom
+31.0
Investment Freedom
0
Financial Freedom +20.0
2015 Index of Economic Freedom