Poland…only member of the EU to avert outright recession

I was not aware of this.

IMF Survey has an interview with Poul Thomsen IMF’s mission chief for Poland. In this interview he discusses how Polish economy fared so much better than other EU members.

IMF Survey online: Looking back to the crisis, what were the key factors that enabled Poland to avoid a recession?

Thomsen: First, Poland is a fairly big economy with a large domestic market, which makes it less dependent on exports. During the crisis, this meant it was less exposed to negative spillovers through the trade channel than other countries in central and eastern Europe, for instance Hungary and the Czech Republic.

Second, Poland has a well capitalized and profitable banking system. That also helped mitigate possible contagion through the financial channel.

A third factor is that policymakers had considerable room for countercyclical monetary and fiscal policy, because Poland did not have any severe macroeconomic imbalances on the eve of the crisis.

Finally, the country has clearly been helped by its flexible exchange rate. Overall, the fact that Poland did so well speaks not only to its strong economic fundamentals, but also to good policy management and sound economic policies.

Hmm. So, Poland had a flexible exchange rate unlike other East Europe economies. Another IMF research article pointed to the importance of flexible exchange rates in the crisis. Another interesting aspect is Poland is not really hurrying into joining exchange rate.

IMF Survey online: Poland’s flexible exchange rate helped the country adjust during the crisis. How quickly should Poland seek to adopt the euro?

Thomsen: The authorities have never set an official date, although at some stage there was an unofficial target date of 2012. Given the adjustment effort that lies ahead for Poland in the next couple of years, one should not set an early date for ERM II entry.

More generally, in determining when to adopt the euro, policymakers should be mindful of how well their country has been served by the flexible exchange rate policy. That said, there is no doubt that euro adoption remains an important goal for Poland.

This is completely different from the other East Europe economies that want to be part of the EMU asap.

2 Responses to “Poland…only member of the EU to avert outright recession”

  1. What if Denmark was part of Europe? « Mostly Economics Says:

    […] is not part of EMU. These are all emerging economies and most have been devastated in this crisis (Poland is one exception, even Czech Republic). There is lots of analysis on this (see this excellent interview for a […]

  2. JAK Says:


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