Poland's consumers are more active.

Poland has the highest unemployment rate in the European Union (EU), according to a June 11, 2007 Associated Press (AP) story posted on the website of the Boston Globe (Boston)-estimated at 13.1 percent in May 2007.

So why is the international financial press full of reports of booming consumer spending in the former Soviet satellite?

The short answer is that Polish consumers are better off than they have been since the end of World War II. The longer answer looks at some of the fallacies behind headlines such as that of the AP story cited above: "Consumer Boom Spurs Polish Economy."

The first exception to take with the `consumer boom' idea is that the EU has been steadily lavishing development funds onto the Polish economy. This has allowed Polish industry to grow, and with that Polish exports grew as well.

Consumers are a little late to that party. Perhaps a better way of looking at Poland's consumer economics is to say that the EU's development efforts have now made it possible for the country's consuming class to be more visible and active.

The AP story said that Poland's GDP grew at a rate of 7.4 percent for the first three months of 2007, the best showing since the second quarter 1997. The AP also estimated 2006 GDP growth at 6.7 percent, a very different estimate than the International Monetary Fund (IMF) is using, which is GDP expansion at 5.8 percent. The AP doesn't say which of the assortment of GDP estimates it uses. The IMF relies on constant prices. Possibly the AP is using current prices.

The point is that there is a clear effort to characterize Poland's achievements as more than the reality of the situation warrants.

And this becomes clear in recent consumer survey results published by the highly respected Nuremberg based Gfk Group, the world's fourth largest market research firm.

In May 2007, Gfk asked 1,000 Polish consumers the following question. "Is your household's financial situation better, worse or about the same as it was 12 months ago?" Some 60 percent of respondents said their situation was the same.

By way of comparison, only 39 percent of respondents in Romania answering the same question chose `the same.'

Then Gfk asked, "What are your household's financial expectations for the upcoming 12 months?" And 57 percent of respondents replied, `the same.'

But when Gfk asked, "What is your opinion about the situation of the unemployment in your country for the next 12 months," some 42 percent of respondents answered, `somewhat worse.' Finally, Gfk asked, "What is your household's present financial situation?" Consumers, 66 percent of them, answered: "We can barely make ends meet." Does all of that sound like a "consumer boom" to you?

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