Economic policy

The Polish government's economic policy - presented in the programme "Enterprise - Development - Work II" - covers the realisation of the following strategic goals:

• Return to a 5% annual GDP growth path over the next two years;
• Activating the labour market and increasing employment;
• Efficient use of European funds for the development of the country.

These aims will be realised via the following activities:

• Developing entrepreneurship;
• Promoting employment and limiting poverty;
• Supporting innovativeness;
• The development of infrastructure;
• Increasing regional and local opportunities;
• Efficient use of EU structural funds;
• Restructuring and privatisation of state-owned assets

Government experts believe the key precondition of realising strategic aims is via a strengthening of the economic condition of Polish companies. This is vital to economic recovery, ensuring work, raising civilisational standards and benefiting - amongst other things - from economic models and EU structural funds.In the area of regional policy, the government is continuing administrative reforms aimed at realising the concept of a unitary, decentralised state. This it is doing by shifting duties, responsibilities and funds from central government into the hands of local government. This will mean the end - amongst other things - of the dominance of special (sectoral) administration over regional administration in handling public finances and limit the role of goal-based funds and government agencies. The government expects that a significant share in implementing regional development policy will be assumed by EU funds. It is estimated that after EU accession, the combined value of financial sources expected in the National Development Plan, together with domestic co-financing, may even reach 24-30 million zlotys.The aims and activities outlined in the "Enterprise - Development - Work II" plan cover to a large extent the priorities earmarked in the Lisbon Strategy, the programme for economic and social reform in the EU in the period 2000-2010. Its main aim is to make the EU the most competitive economy in the world. The pro-development initiative is one element of Poland's active attitude to the challenges thrown up in implementing the Lisbon Strategy and EU membership, as well as striving to most fully use the benefits resulting from them.The aim of monetary policy conducted by the National Bank of Poland (NBP) is lowering inflation, and in the longer-term, stabilisation of prices, essential to building lasting foundations for economic growth. The NBP has had a "direct inflation targeting strategy" since 1999. The NBP sets the inflation target within the Lisbon framework and then adjusts the level of official interest rates to maximise the chances of achieving it. The NBP maintains interest rates in line with realising the inflationary target, influencing, in turn, the rate of nominal rates on the money markets. Interest rates on the money markets are split between loans and deposits in commercial banks.
The instruments used by the NBP, such as open market operations, reserve obligations and credit financing, allow for a responsible shaping of market interest rates.
The NBP has the exclusive right to issue bank notes and itself determines when and how much cash it pumps into circulation. Like every central bank, it also influences the domestic currency. However, since April 12, 2000, the zloty has been an exchangeable currency with no controls on it. The central bank sets no upper limits to the strengthening of the zloty against other currencies on the currency market, though does reserve the right to intervene when it sees a possible threat to realising the inflation target. The policies of the NBP have been praised from abroad. The European Commission, for example, preparing its annual report on the preparedness of candidate countries for EU accession, praised the Polish central bank for its role in lowering inflation and for its flexible monetary policies.