Sept. 21 (Bloomberg) -- Poland is closing the gap with the Czech Republic in future growth drivers as the European Union’s largest eastern member overhauls its economy, according to Societe Generale SA.
Poland is making more advances in “domestic structural factors” that determine long-term growth prospects and the pace of convergence, or catching up with developed economies, than the Czech Republic, Hungary, Slovakia, Romania and Bulgaria, Anne-Francoise Bluher, a Prague-based economist at Komercni Banka AS, the Czech unit of Societe Generale, wrote in an e-mailed research note today.
Poland adopted unpopular measures such as raising the retirement age and cutting some state pensions as part of its plan to curb public debt to 47.4 percent of output in 2015. It preserved its 41st place this year in the World Economic Forum’s Global Competitiveness ranking, while the Czech Republic slid to 39th from 38th last year.
“We consider the Czech Republic as best placed in terms of future growth compared with” the other five largest eastern EU members, “but it is at risk of losing this position because Poland is catching up quickly in many areas,” Bluher wrote.
Hungary slipped to 60th place from 48th in global competitiveness, while Slovakia also became less competitive. Romania preserved its ranking, while Bulgaria climbed to 62nd from 74th, the World Economic Forum said on Sept. 5.
Poland’s increase in the retirement age to 67 by 2030 from 60 for women and 65 for men will help improve the fiscal outlook, Bluher wrote, with the working-age population estimated to shrink about 30 percent by 2050.
Polish employment in business services has risen “rapidly” in recent years, which may be a result of a “strong” increase in people between ages 30 and 34 attending higher education, she wrote. The nation also improved its use of EU aid to benefit the economy, which will boost investment and improve the work force’s quality, Bluher said.
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