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AD ALTA

JOURNAL OF INTERDISCIPLINARY RESEARCH

indicators as: GDP dynamics, inflation rate, budget deficit ratio,
public debt ratio and exchange.

4. Analysis of monetary and fiscal policy measures against
the competitiveness of the Polish economy

Below is presented an analysis of selected measures describing
monetary and fiscal policy in Poland in the context of the
competitiveness of the Polish economy. The analysis started
with the inflation index as the monetary policy measure. The
most common inflation measure is consumer price index (CPI).
Its popularity results from the fact that it refers to consumption
prices, which is the category of the largest part of GDP.

Inflation in Poland in the analyzed period remains at a low level
(creeping inflation) with the exception of year 2000 when
inflation amounted to 8.5%, otherwise it is generally within the
inflation target (2.5% +/- 1p.p.), with some exceptions (such as
2004 - inflation of 4.4% - when Poland joined the European
Union). The years 2007 - 2008 are a period of intensifying
disturbances on global financial markets, hence inflation in 2007
was 4.0% and exceeded the inflation target.

Significant signs of price declines were observed in the second
half of 2014. Deflation lasted until 2015, mainly due to the fall
in oil prices (which reduced production costs and increased
corporate profits). In the last two years of analysis (2015-2016),
deflation initially remained and 2016 saw low inflation. The
latest GUS report indicates that inflation in the first quarter of
2017 increased by 1.1% compared to the previous quarter and by
2% compared to the first quarter of 2016.

Inflation was

accelerating at the beginning of 2017, which was mainly
influenced by external factors.

The NBP's projection (March

2017) for the annual inflation rate YOY terms is 2.00%, which
means that it continues to be in the inflation target.

Apart from

inflation, the central bank may also to some extent influence the
money supply, summarizes in Table 2.

Table 2. Total money supply, consumer price and service indices
in the period between 2000-2016

Year

Total money

supply (in bln

PLN)

Total

money

supply (as

M3) Data

in % of

GDP

Price-inflation ratio

– a month ending

the period

(December of the

previous year = 100)

Reference

rate

(%)

at the end

of the

year

2000

300 757,3

40,3

8,5

19,00

2001

329 704,7

42,3

3,6

11,50

2002

326 124,9

40,2

0,8

6,75

2003

345 144,8

40,8

1,7

5,25

2004

377 534,5

40,5

4,4

6,50

2005

427 125,4

43,1

0,7

4,50

2006

495 309,5

46,3

1,4

4,00

2007

561 623,8

47,3

4,0

5,00

2008

666 231,3

51,8

3,3

5,00

2009

720 232,5

52,5

3,5

3,50

2010

783 648,5

54,2

3,1

3,50

2011

881 496,3

56,3

4,6

4,50

2012

921 412,5

56,5

2,4

4,25

2013

978 908,2

59,1

0,7

2,50

2014

1 059 015,3

61,6

-1

2,00

2015

1 154 992,6

64,2

-0,5

1,50

2016

1 265 675,2

68,4

0,8

1,50

Source: Own study based on: statistical data of GUS available at
http://stat.gov.pl/wskazniki-makroekonomiczne (access 18
November 2017).

Money supply in Poland measured by the broadest aggregate -
M3 - in the analyzed period is systematically increasing

. In

Poland, the central bank uses a policy of low interest rates
(compared to historical data) which should favor the economy
(though not always). Currently (December 2017) the main
interest rates of NBP have been not changed since March 2015
(Table 2).

Statistical data of GUS available at http://stat.gov.pl/wskazniki-makroekonomiczne/.

Monetary Policy Council, Inflation Report, March 2017, NBP,15 p.

Official page of NBP, www.nbp.pl, access 10 December 2017.

Ibidem.

In Poland, the exchange rate has been floating since 2000, which
means that it is shaped by the balancing of supply and demand
for currencies. Table 3 shows the exchange rates of USD, EUR
and CHF in PLN.

Table 3. NBP official exchange rates (annual average) in the
period between 2000-2016

Years

100 USD (in PLN)

100 EUR (in PLN)

100 CHF (in PLN)

2000

434,64

401,10

257,47

2001

409,39

366,85

243,10

2002

407,95

385,57

262,70

2003

388,89

439,78

289,05

2004

365,40

453,40

293,58

2005

323,48

402,54

259,99

2006

310,25

389,51

247,61

2007

276,67

378,29

230,35

2008

240,92

351,66

222,02

2009

311,62

432,73

286,58

2010

301,57

399,46

289,51

2011

296,34

411,98

334,84

2012

325,70

418,50

347,21

2013

316,08

419,75

341,00

2014

315,51

418,52

351,23

2015

377,01

418,39

392,00

2016

394,31

436,25

400,21

Source: Own study based on statistical data of GUS available at
http://stat.gov.pl/wskazniki-makroekonomiczne/ (access 18
November 2017).

Observing the exchange rate data, we note that the PLN
exchange rate strengthened significantly against the USD in
2007-2008, while against the EUR and the CHF it was observed
in 2001-2002 and 2007-2008, which was probably influenced by
the economic slowdown of 2001-2002 and the 2007-2008
financial crisis.

Next, statistical data from the area of fiscal policy are presented
below. The analysis began with the most commonly used
measure of economic growth, which is the dynamics of GDP,
GDP in current prices, GDP per capita (table 4) This pace
determines how fast the economy is developing.

Table 4. GDP Dynamics, GDP in current prices and GDP per
capita expressed in the Purchasing Power Standard (PPS) in
years 2000-2016

Years

GDP growth

in %

GDP in billion PLN

current prices

GDP per capita in PPS

(UE 28 = 100)

according to GUS

2000

4,60

747 032

2001

1,20

779 975

2002

2,00

810 617

2003

3,60

845 930

2004

5,10

933 062

2005

3,50

990 468

2006

6,20

1 069 824

2007

7,00

1 187 605

2008

4,20

1 286 069

2009

2,80

1 372 208

2010

3,60

1 445 298

2011

5,00

1 566 824

2012

1,60

1 629 425

2013

1,40

1 656 895

2014

3,30

1 719 769

2015

3,80

1 799 392

2016

2,90

1 858 637

Source: Own study based on statistical data of GUS available at
http://stat.gov.pl/wskazniki-makroekonomiczne/ (access 18
November 2017).

GDP growth in Poland declined considerably at the beginning of
the analyzed period, i.e. in the years 2001-2002, which was
related to the overall economic slowdown. Then, after a period
of relatively high GDP growth in 2004, 2006-2007, this
dynamics significantly decreased. Clear pace started to slow
down in 2008-2009 and in 2012 - 2013 (although the growth was
positive). In the first period, this could have been the result of
the global financial crisis; in the second, the deceleration of
public investment after Euro 2012 and the attempt to consolidate
public finances (i.e. the reduction of public expenditure to
stabilize the General Government sector).

The analysis of GDP per capita eliminates an impact of absolute
population size facilitating comparisons between countries
because it reflects purchasing power of each currency. GDP

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