Poland's experience with capital flows in the 1990s
In recent years, Poland has been central and eastern Europe's most dynamic economic performer, posting an annual average growth rate of 6 per cent over the past five years. Annual inflation has been on a steady downward path and reached the single digits, for the first time since transition, in the fourth quarter of 1998. Moreover, Poland's sound policy fundamentals have supported market-oriented reforms. Over the past few years, these strong fundamentals have attracted substantial capital inflows, particularly in the form of foreign direct investment, which have played an increasingly important role in Poland's growth and development. These inflows accelerated during 1998 and remained remarkably stable even in the wake of the Russian crisis. This chapter describes developments in the financial account of Poland's balance of payments since 1991, examines some of the macroeconomic consequences of these flows and compares Poland's foreign direct investment developments with other transition and emerging market economies.