Although Poland and the other CEE countries have coped well with the current crisis, the pace of convergence is gradually slowing. The remedy can be found in “The Warsaw Consensus”- a complex growth model for the region, which can lead to a steady development.
The decline in oil price and economic sanctions deepened the slowdown in Russia’s GDP lasting from 2011. Due to the lack of internal and external growth drivers, this time Russia is unlikely to return to a high-growth path over the next few years.
Ukrainian authorities are considering how to rebuild Donbass, destroyed by Russian mercenaries. Unless the West takes part in the procedure, decisions are likely to depend on under which variant the most money can be transferred to the pockets of oligarchs associated with the governing team rather than on economic effectiveness.
A distinction must be made between the privatization of previously state-owned enterprises and the privatization of the market, for instance, through the creation of new, private, companies. This latter process has been a success with positive consequences for entire economy – says prof. Leszek Balcerowicz, author of the 1989 reforms.
GDP growth of 3.6 per cent this year and similar results in subsequent years, with low inflation and an improvement in the labor market – this is the scenario predicted in March 2014 by the NBP’s Economic Institute. We are also not in danger of seeing large capital outflows. However, a worsening of the crisis in the East may have repercussions.
Petr Necas's determination to drive down the Czech Republic's budget deficit has been so strong that he sparked a political crisis which almost unseated his government and has many economists blaming him for the country's lengthy recession.
Recession looms over Ukraine. The oligarchs rule. A currency crisis may break loose at any time. Foreign investors demand a high risk premium, some of them retreat. High interest rates hamper domestic investment, while domestic consumption is stemmed by recession. And we do not have the first idea how poor our neighbour is.
“The era of optimism dies in the crisis, but in dying it gives birth to an era of pessimism. This new era is born, not an infant, but a giant”. Both optimism and pessimism underpin the fluctuations of business cycles. This is what Wesley Mitchell, the father of research on business cycle wrote in 1927. Almost a century later, little has changed, which also applies to our country.