Prosperity Gaps to Widen in all Polish Regions

The marked differences in economic development of the individual Polish voivodships will not fade in the next four years, on the contrary, the gaps between the most and least rapidly developing regions are to widen. The Dolnoslaskie voivodship has the best prospects for the future, thanks to foreign investments in the manufacturing sector.

(PRWEB) December 19, 2005 -- The marked differences in economic development of the individual Polish voivodships will not fade in the next four years, on the contrary, the gaps between the most and least rapidly developing regions are to widen. The Dolnoslaskie voivodship has the best prospects for the future, thanks to foreign investments in the manufacturing sector.

According to a report entitled “Poland: Regional Economic Forecasts 2005-2008,” published by a research and consulting firm PMR, the Dolnoslaskie voivodship will outperform the Slaskie voivodship in GDP generated per capita by the end of 2008. Last year, according to PMR estimates, the Mazowieckie region was most affluent in Poland with per capita GDP of more than 150% of the national average. Among the other voivodships, above average per capita GDP was also posted only by the Slaskie, Dolnoslaskie and Wielkopolskie voivodships. The situation will not change in the next four years. Above average per capita GDP will continue to be recorded by only the foursome; meanwhile, the Slaskie voivodship, which currently ranks second, will move down a notch to make room for the booming Dolnoslaskie voivodship.

According to PMR’s forecasts, in the next four years the Dolnoslaskie will be the most rapidly developing voivodship in Poland with average annual economic growth (computed at current prices) of more than 9% in 2005-2008, 50% higher than in the neighbouring Slaskie voivodship. Its dynamic development will be a by-product of material growth in capex by both domestic and foreign investors. The voivodship’s key assets are: good condition of infrastructure (including the presence of three special economic zones), proximity to Germany and the Czech Republic, access to qualified workforce and high quality post-secondary education. “Investors value those features of the Dolnoslaskie voivodship – more than 60 firms have to date invested approximately PLN 6bn (approximately €1.5bn) just in its special economic zones, to create more than 20,000 new jobs”, Marcin Sadowski, the report author, commented. Given the agreement concluded with the Korea-based LG Philips LCD, maker of liquid crystal display (LCD) screens, comparable optimism may be sourced in forecasts for the next four years. It has been estimated that the Korean investment will provide approximately 7,000 new jobs at the manufacturer’s new production plant and at the plants of its sub-suppliers.

In addition, as the report authors point out, GDP growth in Poland is characterised by high regional concentration – two voivodships (Mazowieckie and Slaskie) generate more than a third of the total gross domestic product. Concurrently, the two voivodships are inhabited by a quarter of Poland’s total population.
According to PMR’s estimates, last year, the five largest voivodships generated close to 60% of the total GDP, though they were inhabited by 50% of the total population. This means that in the past six years, their percentage share in the GDP has expanded by more than 1.5 p.p. According to forecasts prepared by PMR, this trend will gain momentum in the next four years. As a result, in 2008, the five largest voivodships will generate more than 61% of the Polish GDP.

In the next four years, the economic situation in the less developed regions will improve at a decisively slower pace than in the more developed voivodships. In 1998, the gap between the voivodships with the greatest and smallest contribution to the total GDP was 16 p.p. Meanwhile, PMR believes that it will expand to 19 p.p. by the end of 2008. The EU funds channelled especially to the regions most hard up will not change the situation. “The influx of EU structural funds will in the near term merely weaken the momentum at which the economic gap between the least and most developed regions widens, instead of working to effectively reduce regional disproportions,” Mr Sadowski added.

You are welcome to contact the author of the report:
Marcin Sadowski, Senior Economist
tel. /48 12/ 618 90 53

PMR
ul. Supniewskiego 9
31-527 Kraków
tel. /4812/ 618 90 00, fax /4812/ 618 90 08
www.pmrcorporate.com

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