Poland’s growth record put to the test

This article is a part of Poland Unpacked. Weekly intelligence for decision-makers

For a quarter of a century, Poland’s GDP per capita grew by an average of 3.6% a year. Yet 101 out of 185 economies experienced at least one 25-year period of equally rapid or faster growth. The picture changes when we account for their starting levels of development. By that measure, Poland’s achievement turns out to be far more unusual.

Poland has enjoyed more than three decades of rapid economic growth, steadily closing the gap with the world’s wealthiest countries. Since the country’s transition from communism to a market economy, real GDP per capita has increased severalfold, bringing Polish income levels substantially closer to those of Western Europe. Against this backdrop, Poland’s economic success is frequently described as exceptional. The argument is often supported by international comparisons ranking Poland among the world’s fastest-growing economies in recent decades.

But rapid growth alone does not necessarily make an economic success story historically exceptional. Many countries have experienced periods of remarkably fast convergence, particularly when starting from low income levels. The more revealing questions, therefore, are not only how quickly Poland grew, but how many other economies managed to sustain comparable growth for just as long – and how prosperous they were at the outset. Answering these questions helps establish what truly sets Poland’s economic experience apart.

Poland’s economy grew by 3.6% annually for 25 years

Our comparison covers the period from 1998 to 2023. During those years, Poland’s real GDP per capita grew by an average of 3.6% annually, according to data from Penn World Table 11.0. Choosing 1998 as the starting point allows us to focus on a period for which consistent national accounts data are available for Poland’s market economy.

This distinction matters because growth estimates covering the early years of Poland’s transition from communism are highly sensitive to the choice of base year. Between 1989 and 1991, the country experienced a sharp contraction in output as it moved from central planning to a market economy. Comparing statistics from the communist-era economy with those produced under the subsequent national accounting system presents an additional challenge. As a result, starting the calculations in 1989, 1990 or after the post-communist recession can produce markedly different estimates of average growth. Focusing on 1998–2023 helps minimize these distortions while providing a sufficiently long period – a full quarter-century – to compare Poland’s performance with other economies’ sustained growth episodes.

101 economies matched or outpaced Poland’s growth

A comparison with other economies shows that sustaining rapid growth for a quarter of a century was not, in itself, particularly exceptional. Of the 185 economies included in the analysis, 101 experienced at least one 25-year period during which real GDP per capita grew at an average annual rate equal to or higher than Poland’s 3.63% between 1998 and 2023.

In other words, more than half the economies in the dataset have achieved comparable or faster growth at some point in their history. These episodes, however, occurred in very different periods – from the postwar reconstruction of European economies to later waves of rapid convergence in Asia and Central and Eastern Europe.

Some growth rates were nothing short of staggering. China averaged 9.2% annually between 1982 and 2007, although the reliability of some of the underlying data remains contested. South Korea was not far behind, growing by an average of 8.1% annually over the 25 years beginning in 1967, while Japan recorded 7.1% from 1950. It is no coincidence that these economies are often grouped together: their development models shared a strong reliance on exports.

Postwar reconstruction in Germany and Italy delivered annual growth of nearly 5% between 1950 and 1975. Southern European economies catching up with their wealthier neighbors grew even faster, with Greece and Spain averaging 5.6–5.8% a year. Poland itself also recorded a faster 25-year growth episode than the one examined here, averaging 4.3% annually between 1993 and 2018.

Other episodes have largely faded from memory. How many people remember that Brazil was growing at around 5% annually in the 25 years leading up to 1976? Or that Egypt averaged 4% growth a year from the beginning of Gamal Abdel Nasser’s presidency? Botswana’s remarkable performance – averaging 9% annually between 1965 and 1990 – is well known among development economists. But Mali’s 7% annual growth over a 25-year period beginning in 1993 might raise a few eyebrows. Nor are all such examples confined to the distant past: Ethiopia has averaged more than 5% annual growth since 1998.

Growing fast is easier when you start poor

The starting level of economic development is crucial in such comparisons. Poorer countries naturally have more room to catch up with technological leaders. Rather than bearing the full cost of developing new technologies, expertise and organizational practices, they can adopt solutions that already exist. They can also benefit from capital inflows, workers moving from less productive to more productive sectors, and integration into global value chains. In some areas, they can even engage in leapfrogging – skipping earlier stages of development and adopting newer technologies directly.

These mechanisms underpin economic convergence. Given favorable institutions and macroeconomic stability, lower-income countries are better positioned to sustain rapid productivity and per capita GDP growth over long periods. As countries become wealthier, however, the potential for relatively straightforward catch-up growth gradually diminishes. Further development must increasingly rely on homegrown innovation and productivity gains. This is why 25 years of 4% annual growth in a country starting from a very low income base is not directly comparable to the same performance achieved by an already relatively prosperous economy.

An exclusive club

The data confirm that starting income levels make a substantial difference. Poland entered the period under review in 1998 with real GDP per capita of approximately USD 15,400, according to Penn World Table (PWT). Yet the vast majority of economies that have ever sustained 25 years of growth at least as fast as Poland’s 3.6% annually did so from significantly lower income levels.

Moreover, for each country shown in the chart, we select the 25-year period with the highest starting GDP per capita among all episodes that meet our growth threshold. We are therefore not comparing Poland with an arbitrarily chosen period of rapid growth elsewhere. Instead, we compare it with the most advanced starting point from which each economy was still able to sustain such growth for another quarter-century.

The difference is striking. Of the 101 economies with at least one qualifying growth episode, 67 started with GDP per capita below USD 10,000, even in their highest-income qualifying period. The median starting level was just USD 6,500, compared with Poland’s USD 15,400. Only 12 economies, including Poland, managed to sustain growth at least as fast as Poland’s for 25 years while starting from a GDP per capita no lower than Poland’s in 1998. Even this select group includes several tiny economies and territories, such as the Cayman Islands, Macau, Aruba and Anguilla.

Only six larger economies managed to match Poland’s growth performance while starting from a higher level of GDP per capita: South Korea, Taiwan, Slovakia, Ireland, Singapore and Hong Kong. Exclude the city-states and Ireland, where the activities of multinational corporations artificially inflate GDP growth figures, and just three economies remain alongside Poland: South Korea, Taiwan and Slovakia. That is an exclusive club indeed.

Not every country had a chance to match Poland’s performance

There is, however, an important caveat to this comparison. To qualify for this exclusive group, an economy must first have reached at least Poland’s 1998 level of GDP per capita. Historically, far fewer economies have crossed that threshold, meaning the pool of potential contenders is much smaller by definition. Excluding Poland, six out of 45 economies meeting the relevant GDP per capita and population criteria managed to achieve comparable growth.

Others may join the group over time. Turkey, for example, crossed the USD 15,400 threshold in purchasing power parity (PPP) terms in 2006 and has since recorded average annual per capita growth of 3.5%. Panama presents a similar case. China, meanwhile, has spent only six years above that income threshold, but its per capita GDP has grown at an impressive rate of more than 5% annually during that period.

How far was Poland from the technological frontier?

Another way to measure a country’s initial level of development is to examine its distance from the United States. The US can serve as a rough proxy for the global technological frontier, which less developed economies can approach by adopting existing technologies and improving productivity. The OECD, among others, uses this approach in its long-term growth models. In 1998, Poland’s GDP per capita stood at approximately 30% of the US level.

The chart above shows that most economies that sustained growth at least as fast as Poland’s for 25 years started from a greater distance behind the US. Cases of equally rapid growth from a more advanced starting point are much rarer, although more common than when using an absolute GDP per capita threshold.

This broader group includes several advanced Western European economies: France, Italy, Austria, the Netherlands, Finland and Germany. Their growth episodes largely reflect postwar reconstruction and convergence among countries that were already relatively prosperous at the time. Poland’s experience bears a closer resemblance to that of Southern Europe. Spain, Greece and Portugal all achieved growth rates comparable to Poland’s, starting in the 1960s from income levels equivalent to roughly 30% of US GDP per capita.

Exceptional or not? Poland’s growth in historical perspective

So, was Poland’s economic growth exceptional? It depends on how we define exceptional. The pace of growth itself was not unprecedented. The data reveal dozens of economies that sustained equally rapid or faster growth for a quarter of a century. Poland’s experience becomes far more unusual, however, once we account for its starting level of development. The more narrowly we focus on economies at a similar stage of convergence, the fewer comparable cases we find. Even so, the postwar histories of Europe and Asia show that Poland’s achievement was not without precedent.

Perhaps this is the most useful way to view Poland’s economic success: not as an economic miracle that no country had ever achieved before, but as a rare example of rapid, sustained convergence despite an increasingly high level of development. This distinction also matters for the future.

Poland is now considerably closer to the global technological frontier than it was a quarter of a century ago. As a result, some of the mechanisms that made catching up relatively straightforward will gradually lose their effectiveness. Annual per capita growth of 3–4% cannot be taken for granted. Sustaining rapid convergence will increasingly depend on productivity, innovation and Poland’s ability to push the technological frontier forward, rather than merely catch up with it.

Poland’s growth rate was not unprecedented. Between 1998 and 2023, Poland’s real GDP per capita grew by an average of 3.63% annually. However, according to Penn World Table (PWT) data, 101 out of 185 economies experienced at least one 25-year period of equally rapid or faster growth.
Most comparable growth episodes began from much lower levels of development. Poorer countries have greater potential for economic convergence, partly because they can adopt existing technologies and attract capital. Once starting GDP per capita is taken into account, the number of economies with growth records comparable to Poland’s falls sharply.
Poland’s growth was rare, but not without precedent. Few larger economies managed to sustain equally rapid growth for a quarter of a century while starting from a similar or higher level of development. Historical examples from Asia and postwar Europe nevertheless show that Poland was not alone in achieving this feat.