Economic performance
The current account deficit increased by more than USD 4 700mn from last year to USD 11 568mn. This was due to a reduction in exports by USD 4 143mn. The main reason for the widening trade gap should be sought in the collapse of exports to countries of Central and Eastern Europe, particularly Russia and Ukraine. Imports was reduced by USD 2 367mn, and the trade balance showed a deficit of USD 16 004mn, compared to USD 14 228mn one year ago. One factor stimulating imports, despite the decline overall, was the large inflow of foreign direct investment. These investments were coupled with the transfer of modern technologies, which spurred an increase in imports of goods and services.
The ensuing inflow of capital came to USD 6 471mn over the whole of 1999, giving an increase of USD 1 342mn compared to the previous year. The most significant component of direct equity investment was receipts from the privatisation of Polish companies and banks.
Even with a growth in the GDP by 4.5 per cent, there was rising unemployment, especially in the last quarter of the year. Unemployment rose by 519 000 people to 2 350 000 i.e. 13.0 per cent.