With an economy growing by more than 3 percent annually in recent years, Poland has been Eastern Europe’s powerhouse since the onset of the global financial crisis. However, this success story should now be taken with a grain of salt, according to none other than the country's finance minister, Mateusz Morawiecki.
Mr. Morawiecki, who is also deputy prime minister in a right-of-center cabinet led by Beata Szydło, said this week that the data used to calculate Poland’s gross domestic product (GDP) had been significantly distorted by tax fraud in the past, according to a report in German daily Frankfurter Allgemeine Zeitung.
The politician of the country’s ruling conservative party Law and Justice (PiS) was referring to 2014 and 2015, the last two years of the previous legislature. He contends that the economic output might have been artificially enhanced by up to a total of €7 billion ($7.52 million). This would mean that GDP growth for 2015 should be revised from 3.6 percent to just 1.9 percent.
The shortfalls are believed to be caused by sales tax fraud. In Poland, this tax is reimbursed for exported goods. Organized crime rings have allegedly falsified the corresponding papers, and sold goods on the domestic market instead of exporting them.
Corporate consulting firm PWC estimates that Poland lost some €12 billion, or 2.9 percent of its GDP, in 2015 alone.
In an initial statement, the Polish statistical office said that there were no corrected figures for this period as of yet. Authorities intend to publish a temporary update of GDP data.
But the Polish economy has reasons to stay optimistic despite this unhappy surprise.
On Monday, Mr. Morawiecki said Germany's eastern neighbor will attract up to 30,000 jobs from Britain’s financial sector in this year, news agency Reuters reported.
“Some time ago Poles were departing to London, but now it is the other way round,” the prime minister, himself a former banker, told a news conference.
More than one million Poles have emigrated to Britain, Germany and other western European countries since the country gained E.U. membership in 2004.
Warsaw has stepped up its efforts, not just to lure back the émigrés, but also win business from London since the Brexit referendum last June, offering incentives to banks and funds to relocate to Warsaw. Already, 200,000 people work in offshore operation centers in Poland, including 50,000 working for international banks.
Jean-Michel Hauteville is an editor with Handelsblatt Global in Berlin. To contact the author: [email protected].