Saturday, 31 January 2009

Poland: Is there a crisis going on?

The media are going bonkers - is there really an economic crisis? Unemployment - surely the best measure of how an economy is delivering - has indeed nudged up, but from 8.8% to 9.5%.

But it's not the 20.4% it was back in 2004 - when the economy was growing by an annualised rate of 6%!

Much of the gloom is media generated.

This headline from last Tuesday’s Gazeta Wyborcza-cor-wot-a-scorcza really annoyed me: “POLACY KUPUJĄ MNIEJ” (”Poles are buying less”).

I read on. December’s consumer spending was 6.6% UP on December 2007. So in fact, Poles are buying MORE.

BUT, the article continues, consumer spending growth in the first half of 2008 was galloping along at 15% - 20% year on year.

So - the headline should not have been: POLES ARE BUYING LESS, but POLES ARE BUYING MORE, THOUGH AT A SLOWER RATE OF GROWTH THAN HITHERTO.

Economic illiteracy worthy of Gnash Dziennik’s chief leader-writer, and typical of media coverage of this so-called ‘economic crisis’.

Where are the good news stories? 1,000 new jobs from Hewlett Packard's shared service centre in Wrocław? The 1,700 new jobs from Thomson Reuters' research centre in Gdynia? Dell moving all of its European manufacturing from Limerick to Łódź? Associated British Foods building a second factory in Nowa Sól? Cadbury's opening Europe's largest chewing gum factory in Opolskie? Fiat's thrifty, trendy 500 (built in Tychy) selling so well the factory's output rose by 80% last year?

The USA shed 65,000 jobs in one day last week. Britain has seen registered unemployment rise by 212,000 in the third quarter of 2008. Poland has also seen unemployment rise during this same period (Oct-Dec). By 11,600. Some difference!

It took me over two hours to do the weekly shop this morning. The car park was packed solid at half past nine, the aisles were immobile with trolleys, the queues to the checkouts (all 63 of them) were almost as long as they were before Christmas.

Things may not be as rosy as they were a year ago. But this is not a kryzys.

Growth is slowing. That's it. Banks are not stopping clients from making withdrawals. Petrol stations are still delivering petrol. Staff are getting paid (public and private sector). Inflation in under control. So why are the media trying to scare everybody into a panic?

This time last year:
From the family archives
Taking off from Okęcie
Air-to-air photos from Europe's crowded skies

5 comments:

adthelad said...

I've been totally thrown by the media hype. Why is everyone selling the zloty? Or is something else going on? The high interest rates should be attracting money although of course business has to pay more to borrow.
I'm totally flummoxed. Is this some plot to undermine the Polish economy? In some ways I get the feeling that the Polish drive will help us through any downturn, for if there is any culture (other than the hard working Pakistani's) then it's the Poles who will work at two or three jobs (whether declared or not) to keep their families in the manner they've become used to.
Polak potrafi (jeżeli mu sie naprawde chce) :)

Michael Dembinski said...

Zloty being sold because those Masters of the Universe in New York and London who awarded themselves zillions in bonuses last year can't tell Hungary or Latvia or Ukraine (which are in crisis) from Poland or Czech Republic (which according to the OECD are best placed to ride out the storm). Poland = East Europe = crisis so sell sell sell.

Which has its advantages - EU funds will now go 20% further in Poland as a result, and Polish exports have become more competitive.

Michael Dembinski said...

Also agree Adam on your point about Polak potrafi. Poland has been through so much economic turmoil in the past 80 years that an economic slowdown like this one will not rock the national psyche.

DC said...

What about consumer credit? Have you seen any tightening there in Poland?

Michael Dembinski said...

To early for 2009 indicators, but in 2008, sales of household goods (fridges, washing machines, dishwashers etc), grew by over 10%, while in the UK, Germany and Italy, sales fell be around 10%. The SGH consumer banking barometer fell for the third month in a row (2.5% fall) but is still positive. 48.6% of individual clients still have no problems with making their repayments on time, 38.9% with 'small problems', 6.2% being up to 6 months late with repayments and 5.4% being over 6 months behind with repayments.

Source of both stories - today's Rzeczpospolita.