Poland currently has about 31% higher GDP per capita by purchasing power parity (PPP) than it would have if it had not joined the European Union, according to calculations by the Polish Economic Institute (PIE) using the synthetic control method. Poland’s GDP per capita grew almost 1.5 percentage points per year faster than it would have if our country had remained outside the EU.
In 2021, Poland’s GDP per capita at purchasing power parity was 78% of the EU average, compared to 40% in 1990 and 50% in 2004. If it were not for EU membership and participation in the single market, Poland’s GDP per capita at PPP would be 60% of the EU’s, according to the report.
If Poland had not participated in the single market and been an EU member state, its GDP per capita would have been at 2014 levels in 2021. Poland’s GDP per capita would thus have grown almost 1.5 percentage points per year faster than if it had remained outside the single market and the EU. While GDP per capita is not an exhaustive measure of quality of life, it translates into very tangible things: higher wages, corporate and state budget revenues, and consequently higher levels of prosperity for Poles in the EU, according to the report “Poland’s benefits from the single market.”
Almost 1/4 of Polish GDP in 2018 depended directly or indirectly on economic cooperation with EU countries. Polish companies are not only engaged in the production of final goods (including household appliances, consumer electronics, furniture, electronics), satisfying the demand of EU consumers and businesses. They also became sub-suppliers of parts to foreign factories producing final goods. As a result, Polish added value could also indirectly go to other countries, including those outside the EU, the Institute stressed.
Participation in the single European market translates into jobs in Poland. In 2018, thanks to the demand of EU countries for goods and services containing Polish added value, there were 3.324 million jobs in Poland. Compared to 2004, the number of workers whose jobs depend on the demand of EU countries increased by as many as 1.257 million. The largest number, 1.15 million jobs in Poland, was generated by end-user demand in Germany in 2018, the report further indicates.
The benefits of operating in the single market are highlighted by goods exporters surveyed by PIE in cooperation with the Central Statistical Office (GUS).
As many as 78% of companies exporting to the European Union declare that being part of the EU gives them a better competitive position than non-EU companies. The better position mainly benefits large companies, in which more than half of revenues are exports, and companies with foreign capital, the report presented.
When asked about the possibility of improving the functioning of the single market, goods exporters most often pointed to the need to expand the operation of common certificates and standards and to simplify administrative procedures in the countries to which they export. They also saw opportunities for improvement in the introduction of facilitating the employment of foreigners, extending the validity periods of permits and spreading access to the latest technologies.
The synthetic control method involves constructing a counterfactual model of Poland, which has not joined the EU, based on assembling its economy from other economies that have not joined the EU, and in the base year the structure of their economies and the level of development indicated similarities with the Polish economy. As a result, the estimate of the development of Polish GDP without EU accession is calculated on the basis of actual data of several to a dozen countries, the Institute explained.
Source: PIE and ISBnews
