Concern for Polish worker emigration.

Poland's Economic Ministry has raised the prospect of a difficult problem connected with the emigration of Polish workers. In a March 15, 2007 posting on the B92 (Belgrade) website, which cites Poland's Economic Ministry as its source, says that the mass emigration of Poles to other countries threatens to undermine the rapid economic progress that Poland has made in recent years.

Specifically, the posting says, "Estimates on how many Poles have so far left for Western Europe vary from [an] official 660,000 to [an] unofficial 2-million people, including those working in the black market."

The posting quoted the Economic Ministry as saying that the loss of so many workers-especially skilled workers-could reduce growth in GDP by as much as 3.5 percent per year.

While the problem clearly exists, the 3.5 percent loss estimate seems inordinately high, especially since some of the loss of workers to Western Europe could be made up by immigration from developing countries in Eastern Europe.

Meanwhile, on April 11, 2007, the weekly magazine Polityka (Warsaw) ran a story by a well respected journalist who specializes in economics saying that Poland owes it current substantial growth to European Union (EU) membership. The story pointed out that Poland's economy grew 5.8 percent in 2006, and estimated that GDP would grow 7 percent in 2007. The International Monetary Fund (IMF) agrees that Poland's GDP grew 5.8 in 2006, but the IMF says Poland's GDP will grow only an additional 5.8 percent in 2007.

One of the predictions made by the Economic Ministry-that Poland would face inflationary pressures because so many workers were leaving the country, thus driving up wages and, presumably, consumer spending-gained some credence with reports of rising inflation in March 2007. The Warsaw business newspaper Puls Biznesu said on April 16, 2007, that March 2007 inflation increased 2.5 percent when compared with inflation in March 2006. Rising fuel and food costs were blamed. Expectations are that no interest rate hikes will result with the central bank taking a wait-and-see approach.

MARKET FOCUS: