Poland should invest in improving productivity in order to maintain a high growth rate, the World Bank said in a report on Wednesday.
The Polish economy’s growth rate has been one of the highest in the world over the past 30 years, the World Bank said. However, in order for the country to continue closing the gap with Western Europe, Poland should support productivity improvements through adequate public instruments, including ones focused on small and medium-sized enterprises (SMEs), the World Bank said in its report, titled ‘Paths of Productivity Growth in Poland.’
The report recalled that Poland’s GDP had increased threefold over the past three decades and in 2009 the country joined the group of high-income economies, as defined in the World Bank’s methodology. Despite outstanding growth performance, however, Poland’s economy still lags behind those of many European countries, the report warned.
The gap is also visible at the level of businesses where an average Polish manufacturing company needs three times as many employees to produce the same goods as a comparable German company.
Additionally, productivity in the manufacturing sector has not been growing rapidly since 2012 and the sector’s development is mainly fuelled by capital intensity.
Marcus Heinz, the World Bank’s resident representative for Poland and the Baltic States, warned that despite the impressive growth record, Poland faces serious challenges, including the levels of investment and an ageing society.
The bank’s recommendations for Poland include improving managerial and employee competence, better use of business advisory services and supporting entrepreneurship clusters. The bank also said the government should support SMEs through eliminating regulatory and financial barriers as well as promoting digital technologies.