ctive assets - to a market economy.
On January 1, 1990, the new Solidarity-led government implemented shock
therapy by slashing subsidies, decontrolling prices, tightening the money
supply, stabilizing the foreign exchange rate, lowering import barriers, and
restraining state sector wages. As a result, consumer goods shortages and
lines disappeared, and inflation fell from 640% in 1989 to 44% in 1992.
Western governments, which hold two-thirds of Poland's $48 billion external
debt, pledged in 1991 to forgive half of Poland's official debt by 1994. The
private sector accounted for 29% of industrial production and nearly half of
nonagricultural output in 1992. Production fell in state enterprises,
however, and the unemployment rate climbed steadily from virtually nothing
in 1989 to 13.6% in December 1992. Poland fell out of compliance with its
IMF program by mid-1991, and talks with commercial creditors stalled. The
increase in unemployment and the decline in living standards led to strikes
in the coal, auto, copper, and railway sectors in 1992. Large state
enterprises in the coal, steel, and defense sectors plan to halve employment
over the next decade, and the government expects unemployment to reach 3
million (16%) in 1993. A shortfall in tax revenues caused the budget deficit
to reach 6% of GDP in 1992, but industrial production began a slow, uneven
upturn. In 1993, the government will struggle to win legislative approval
for faster privatization and to keep the budget deficit within IMF-approved
limits.
National product:
GDP - purchasing power equivalent - $167.6 billion (1992 est.)
National product real growth rate:
2% (1992 est.)
National product per capita:
$4,400 (1992 est.)
Inflation rate (consumer prices):
44% (1992)
Unemployment rate:
13.6% (December 1992)
Budget:
revenues $17.5 billion; expenditures $22.0 billion, including capital
expenditures of $1.5 billion (1992 est.)
Exports: $12.8 billion (f.o.b., 1992 est.)
commodities:
machinery 22%, metals 16%, chemicals 12%, fuels and power 11%, food 10%
(1991)
partners:
Germany 28.0%, former USSR 11.7%, UK 8.8%, Switzerland 5.5% (1991)
Imports:
$12.9 billion (f.o.b., 1992 est.)
commodities:
machinery 38%, fuels and power 20%, chemicals 13%, food 10%, light industry
6% (1991)
partners:
Germany 17.4%, former USSR 25.6%, Italy 5.3%, Austria 5.2% (1991)
External debt:
$48.5 billio