Coming New Year usually resolves us to wrap-up the old one. What important for the future has happened in the Polish economy since last December? Below we list the most important economic events that are influencing economic reality of Poland at the beginning of the new century.

On the top of the list is a piece of good news. Poland, together with Hungary, recorded the highest rate of GDP growth amongst the CEECs and one of the highest in Europe. Despite of unfavorable external conditions, of the sluggish growth at the major trade partners, of the sequence of political quarrels and rapid deterioration of the public mood, the economy has successfully concluded the 1999 with the estimated rate of economic growth close to 4%. Pending reforms of the public sector have finally been started but the muddle at the start (especially with regard to the financing of the health sector) covered premises of the reforms: their positive long-term impact on the economy. The gloomy picture of this area became even darker after the financial catastrophe of the ZUS (social security fund) rapidly deteriorating the standing of the public finance as a whole. On the positive side we note that Poland has opened almost all chapters of the membership negotiations with the EU. The initial positions of both sides have been clarified and the chance to conclude the membership negotiations and to join the club in 3-4 years has been preserved. The turmoil on international financial markets and two waves of weakening the position of zloty have increased inflationary expectations in the economy. The impact of the Russia crisis and the slow down of economic growth in Western Europe significantly deteriorated the current account deficit and slowed down the pace of economic growth in the first half of the year. That, followed by the increase in unemployment worsened the general mood of the public and the consumers’ optimism. Some progress should be noted on the privatization and demonopolization of the economy, especially with regard to the telecommunication and the financial sector. In turn. restructuring of the hard coal sector, which finally has started, was accompanied by cumulating risks like the failure to meet the business plans and some capitulation of the Government in front of coal miners’ wage demands. That was followed by the social unrest and radicalization of opinions of farmers. The government in response drifted the agriculture policy towards temporary solutions to temper social moods instead of attempting to solve problems through the development of rural areas.

So, as the whole, the year 1999 was maybe not a catastrophe, but clearly a rather bad year. However, every bad year has got one advantage. Against such a background, the following year will look much better.