2013 Index of Economic Freedom

Poland

overall score66.0
world rank57
Rule of Law

Property Rights60.0

Freedom From Corruption55.0

Limited Government

Government Spending43.0

Fiscal Freedom76.0

Regulatory Efficiency

Business Freedom64.0

Labor Freedom62.9

Monetary Freedom77.7

Open Markets

Trade Freedom86.8

Investment Freedom65.0

Financial Freedom70.0

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Quick Facts
  • Population:
    • 37.9 million
  • GDP (PPP):
    • $771.7 billion
    • 4.4% growth
    • 4.3% 5-year compound annual growth
    • $20,334 per capita
  • Unemployment:
    • 10.1%
  • Inflation (CPI):
    • 4.3%
  • FDI Inflow:
    • $15.1 billion
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Poland’s economic freedom score is 66.0, making its economy the 57th freest in the 2013 Index. Its score is 1.8 points better than last year, with significant improvements in six of the 10 economic freedoms including financial freedom, management of government spending, business freedom, and freedom from corruption. Poland is ranked 26th out of 43 countries in the Europe region, and its overall score is above the world average.

Advancing economic freedom for the fifth consecutive year, the Polish economy recorded the 10th largest score improvement in the 2013 Index. The economy performs relatively well in many areas of economic freedom. Barriers to free trade are quite low, and commercial operations are aided by regulations that support open-market policies. With a transparent and favorable business climate further supported by political stability, Poland has created a dynamic environment for entrepreneurs. Its economy is the only one in Europe that has expanded every year over the past two decades.

Fiscal consolidation and prudent management of public finance are ongoing concerns, as Poland needs to further reduce the budget deficit and curb public debt growth. The perceived level of corruption has declined, but the rule of law remains challenged by a relatively inefficient judicial system.

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Background

Soviet control of Poland ended with the anti-Communist Solidarity trade union movement’s victory in the 1989 parliamentary election and 1990 presidential election. In the 1990s, Poland was a reform leader and achieved rapid growth. It joined NATO in 1999 and the European Union in 2004. In April 2010, the majority of Poland’s top political leadership died when the presidential plane crashed in Russia. Center-right leader Bronislaw Komorowski won the ensuing presidential election. Prime Minister Donald Tusk of the center-right Civic Platform party was re-elected in October 2011. Agriculture remains one of Poland’s least productive sectors. Thanks to recent reforms, private industry now accounts for two-thirds of GDP. This has made Poland one of the EU’s strongest economic performers.

Rule of LawView Methodology

Property Rights 60.0 Create a Graph using this measurement

Freedom From Corruption 55.0 Create a Graph using this measurement

The legal system protects rights to acquire and dispose of property, but the judiciary is slow to resolve cases and occasionally susceptible to political interference. There can be unexpected changes in laws and regulations. Bribery and abuse of public office are punishable under the criminal code. Due to an overall decrease in corruption, the Polish chapter of Transparency International closed in 2011.

Limited GovernmentView Methodology

The top income tax rate is 32 percent, and the top corporate tax rate is a flat 19 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals 31.8 percent of total domestic income. Thanks to a commitment to austerity and strong growth, government spending has fallen slightly to 43.6 percent of GDP despite fiscal deficits and the ongoing eurozone crisis. Public debt has hovered at 55 percent of GDP.

Regulatory EfficiencyView Methodology

The entrepreneurial framework has been notably enhanced by regulatory reforms in recent years. Launching a business takes six procedures, and the cost of completing licensing requirements has been cut almost in half. The bankruptcy process has become more straightforward and efficient as well. Labor regulations are more stringent than those of other countries in the region. Inflation has been under control.

Open MarketsView Methodology

The trade-weighted average tariff rate is low at 1.6 percent as in other members of the European Union, and there are relatively few non-tariff barriers. Certain areas of investment require government approval, and the regulatory system is not particularly efficient. Foreign and domestic investors are generally treated equally. The growing banking sector has become more competitive, and capital markets are expanding.

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
1Switzerland81-0.1
2Denmark76.1-0.1
3Ireland75.7-1.2
4Estonia75.32.1
5United Kingdom74.80.7
6Luxembourg74.2-0.3
7Finland741.7
8The Netherlands73.50.2
9Sweden72.91.2
10Germany72.81.8
11Georgia72.22.8
12Lithuania72.10.6
13Iceland72.11.2
14Austria71.81.5
15Czech Republic70.91.0
16Norway70.51.7
17Armenia69.40.6
18Belgium69.20.2
19Cyprus69-2.8
20Slovakia68.71.7
21Macedonia68.2-0.3
22Spain68-1.1
23Malta67.50.5
24Hungary 67.30.2
25Latvia66.51.3
26Poland661.8
27Albania65.20.1
28Romania65.10.7
29Bulgaria650.3
30France64.10.9
31Portugal63.10.1
32Turkey62.90.4
33Montenegro62.60.1
34Slovenia61.7-1.2
35Croatia61.30.4
36Italy60.61.8
37Serbia 58.60.6
38Bosnia and Herzegovina57.30.0
39Moldova55.51.1
40Greece55.40.0
41Russia51.10.6
42Belarus48-1.0
43Ukraine46.30.2
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