2014 Index of Economic Freedom

Poland

overall score67.0
world rank50
Rule of Law

Property Rights60.0

Freedom From Corruption54.8

Limited Government

Government Spending43.2

Fiscal Freedom76.1

Regulatory Efficiency

Business Freedom70.1

Labor Freedom60.4

Monetary Freedom77.8

Open Markets

Trade Freedom87.8

Investment Freedom70.0

Financial Freedom70.0

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Quick Facts
  • Population:
    • 38.9 million
  • GDP (PPP):
    • $800.9 billion
    • 2.0% growth
    • 3.4% 5-year compound annual growth
    • $20,592 per capita
  • Unemployment:
    • 10.3%
  • Inflation (CPI):
    • 3.7%
  • FDI Inflow:
    • $3.4 billion
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Poland’s economic freedom score is 67.0, making its economy the 50th freest in the 2014 Index. Its score is 1.0 point better than last year, reflecting improvements in six of the 10 economic freedoms including business freedom, investment freedom, and trade freedom. Poland is ranked 23rd out of 43 countries in the Europe region, and its overall score is above the world average.

Over the 20-year history of the Index, Poland’s economic freedom score has advanced by about 16 points, a top-20 improvement. With increases in nine of the 10 economic freedoms and no declines, Poland has risen since 2002 to the rank of “moderately free.” Structural reforms include trade liberalization, privatization, implementation of a competitively low corporate tax rate, and modernization of the regulatory environment. Poland has achieved its highest economic freedom score ever in the 2014 Index.

Poland has taken steps to restore fiscal discipline despite a challenging economic environment. Continued reform, particularly to strengthen the independence of the judiciary and eradicate corruption, is needed to solidify the foundations of economic freedom and ensure progress toward greater prosperity.

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Background

Poland joined NATO in 1999 and the European Union in 2004. In April 2010, the majority of its top leadership died when the presidential plane crashed in Russia. Center-right leader Bronislaw Komorowski won the ensuing presidential election, and Prime Minister Donald Tusk of the center-right Civic Platform party was re-elected in October 2011. With a flexible exchange rate, approval of an IMF credit line, access to international markets, and healthy economic policies, Poland weathered the 2008 economic crisis better than its neighbors did. Agriculture is held back by inefficiency, structural problems, and low investment, but the automotive, pharmaceutical, aviation, steel, and machinery sectors have made Poland one of the EU’s strongest economic performers. The private sector now accounts for two-thirds of GDP.

Rule of LawView Methodology

Property Rights 60.0 Create a Graph using this measurement

Freedom From Corruption 54.8 Create a Graph using this measurement

Anti-corruption laws are not always implemented effectively, and official corruption remains a problem. The legal system protects rights to acquire and dispose of property, and the judiciary is independent, but the courts are notorious for delays in adjudicating cases. Prosecutors’ slow action on corruption investigations has prompted concerns that they are subject to political pressure.

Limited GovernmentView Methodology

The top individual income tax rate is 32 percent, and the top corporate tax rate is 19 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals 32 percent of domestic output. Public expenditures equal 43.5 percent of the economy, and government debt equals about 55 percent of GDP. The government has indicated that it plans to relax its fiscal rules in hopes of boosting growth.

Regulatory EfficiencyView Methodology

Launching a business takes only four procedures, and the cost of completing licensing requirements has been reduced considerably. Labor regulations are more stringent than those of other countries in the region. The government’s transformation of Poland’s coal mining sector into a commercially viable industry is a textbook case of success in reducing politically sensitive subsidies.

Open MarketsView Methodology

EU members have a low 1.1 percent average tariff rate and, in general, few non-tariff barriers to trade. Foreign investment levels for some sectors of the economy are capped. The financial sector continues to expand. Credit is available on market terms, and foreign investors can access domestic financial markets. Restrictions on capital flows have been removed, and capital markets have become more sophisticated.

Country's Score Over Time

Bar Graph of Poland Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Poland to other economic country groups

Regional Ranking

rank country overall change
1Switzerland81.60.6
2Ireland76.20.5
3Denmark76.10.0
4Estonia75.90.6
5United Kingdom74.90.1
6The Netherlands74.20.7
7Luxembourg74.20.0
8Germany73.40.6
9Finland73.4-0.6
10Sweden73.10.2
11Lithuania730.9
12Georgia72.60.4
13Iceland72.40.3
14Austria72.40.6
15Czech Republic72.21.3
16Norway70.90.4
17Belgium69.90.7
18Armenia68.9-0.5
19Latvia68.72.2
20Macedonia68.60.4
21Cyprus67.6-1.4
22Spain67.2-0.8
23Poland671.0
24Hungary 67-0.3
25Albania66.91.7
26Slovakia66.4-2.3
27Malta66.4-1.1
28Bulgaria65.70.7
29Romania65.50.4
30Turkey64.92.0
31Montenegro63.61.0
32Portugal63.50.4
33France63.5-0.6
34Slovenia62.71.0
35Italy60.90.3
36Croatia60.4-0.9
37Serbia 59.40.8
38Bosnia and Herzegovina58.41.1
39Moldova57.31.8
40Greece55.70.3
41Russia51.90.8
42Belarus50.12.1
43Ukraine49.33.0
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