Key developments and challenges

Poland has continued to record strong growth. A soundly supervised banking system and fiscal consolidation have further improved investor risk perceptions and attracted capital inflows into local equity and government bond markets. Weaker indicators in early 2012 have nevertheless led to a significant downward revision in growth expectations.

The government has initiated important fiscal reforms. These include measures to improve the state pensions system and prevent a further increase in public debt.

Privatisation volumes have been substantial. The four-year programme to 2011 was met in terms of revenue targets, and a new programme for another 300 companies has been announced. The state’s stake in the country’s largest bank, PKO, has been reduced to a minority one, though the state continues to exercise management control.