Thanks to EU membership, Poland’s GDP per capita is 40 % higher

Opublikowano: 29/04/2024

20 years ago, Poland and nine other countries joined the European Union. According to an analysis by the Polish Economic Institute, the GDP per capita of the eight countries in the region is 27 % higher than it would have been had they not joined the EU. The figure for Poland is 40 %. Central European countries are beneficiaries of European funds. In total, they have received EUR 355 billion. The greatest benefits, however, have come primarily from the single market: the inflow of foreign direct investment, the cumulative value of which has increased 21-fold, and integration into global supply chains. The value added generated in ICT services doubled between 2008 and 2021. The region needs to continue to close the development gap, primarily in increasing innovation and improving quality of life and education. These are the main conclusions in the Polish Economic Institute's report “The Big Bang Enlargement. 20 Years of Central Europe’s Membership in the EU”

Poland among the leaders in economic growth thanks to EU membership

The real GDP per capita at purchasing power parity (PPP) of the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia (EU-8) is 27 % higher than it would have been had the Central European countries not joined the EU and developed in the counterfactual scenario. Although it is apparent that there was a decline in growth associated with the 2008 financial crisis, which affected income growth in the region compared to alternative growth paths, from 2014 onwards the EU-8 was achieving higher growth rates than they would have achieved without EU membership. The share of the eight 2004 accession countries in the EU economy increased from 6 to 8.5 %. Poland and Lithuania increased the value generated in industrial production during this period, while the EU saw a decline of more than 1 pp between 2004 and 2022.

“One of the most significant factors that influenced the economic development of our region was Central Europe’s insertion into EU supply chains. This has attracted an influx of foreign investment, led to a fivefold increase in the value of merchandise exports and increased their level of sophistication. EU integration turned Central Europe into an export hub. Although most of the products and services were supplied to the EU, almost half of the added value eventually found its way – also through indirect exports – to markets around the world,” notes Marek Wąsiński, Head of PEI’s World Economy Team.

20 years in the EU have significantly raised living standards

In addition to economic benefits, EU enlargement has also brought about social success for the new members. In all eight countries of the region, indicators measuring quality of life have increased significantly. These include life expectancy, schooling years and per capita income levels. Slovenia currently has the highest HDI (23rd in the world) and Hungary the lowest (46th). Poland’s HDI value was 0.875, placing it 34th out of 191 countries assessed.

Furthermore, in five out of eight Member States, the share of people at risk of poverty has fallen below the EU average, and the perception of corruption has decreased everywhere except Hungary and Slovenia.

Living standards in the countryside have also improved. Despite significant improvements in living standards, the Central European region still lags behind in terms of investment in health care or research and development. Although the percentage of those with a university degree has increased, there were still few graduates in technical fields.

Progress in the ICT sector

The countries of the region almost doubled the value added generated in ICT services between 2008 and 2021, from EUR 24.4 billion to EUR 45.1 billion. In relation to the total GDP of the countries in question, there was an increase from 3.4 % to 4.1 %.

“The added value of the IT/ICT sector has doubled over the past 20 years. Today, among the EU-8 countries, the sector is the largest in Poland and the Czech Republic and together accounts for almost two-thirds of the total value added. Still, the percentage of ICT professionals among all employees is lower than the EU average, with the exception of Estonia. This indicates a lower level of development of the ICT sector, an insufficient number of professionals in other sectors as well, but also a significant potential for digital development. Catching up is a significant challenge for the EU-8,” points out Ignacy Swiecicki, Head of PEI’s Digital Economy Team.

Energy transition in the EU-8 still slow compared to the EU

Joining the EU meant profound changes in the energy sector and climate and environmental policies for the EU-8 countries. Both environmental and climate standards, the structure of energy production and the carbon intensity of the region’s economies have changed (In contrast to the EU as a whole, in Central Europe emission reductions took place primarily as a result of the 1989-1991 system transformation rather than after EU accession).

Accession accelerated RES development in the EU-8 countries. In 2004-2022, the share of renewable energy sources in Poland’s final energy consumption increased by 2.5 times to reach 16.9 %, while the share of RES in electricity production reached 21 % in 2022, an increase of more than 10 times compared to 2004 and only slightly lower than the EU average rate (23 %).

The transformation of the energy, transport and heating sectors has improved air quality. Between 2005 and 2021, the number of premature deaths related to fine particulate air pollution across the EU fell by 75 %. Air pollution in the EU for PM2.5 particulate matter fell by 28 %, nitrogen oxides by 47 %, sulphur oxides by 80 % between 2005 and 2021. These changes also had a positive impact on air quality in the EU-8 countries, where PM2.5 pollution fell by 31 %, nitrogen oxides by 15 %, sulphur oxides by 51 %.

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The Polish Economic Institute is a public economic think tank dating back to 1928. Its research primarily spans macroeconomics, energy and climate, foreign trade, economic foresight, the digital economy and behavioural economics. The Institute provides reports, analyses, and recommendations for key areas of the economy and social life in Poland, taking into account the international situation.

Media contact:
Ewa Balicka-Sawiak
Press Officer
M: +48 727 427 918
E: ewa.balicka@pie.net.pl

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