Poland's Economic Development

In the past quarter of a century Central and Eastern European countries (CEECs) have transformed themselves remarkably through the system change, the transition to a market economy and the EU accession. These countries suffered from the transformational depression after the system change. Afterwards, however, they accomplished the economic growth by expanding their foreign trade with the Western markets. In the second half of the 1990s when the prospect for EU accession became brighter, FDI inflows into these countries increased, boosting up their economic growth. This chapter1 takes up Poland as a typical example for Central Europe (Poland, Hungary, the Czech Republic and Slovakia) and gives an overview of the process of this transformation. With the FDI inflows into the Polish economy, manufacturing industry in particular, the economic structure has drastically changed. In recent years as the share of intra-industry trade in total foreign trade is increasing, the economic structure of Poland is gradually converging on that of the EU-15 (the EU's core countries which have been members already before 2004). After these points are confirmed, the impact of the global financial crisis on the economy and challenges the country is facing will be described.