Poland has been catching up to the rest of the OECD more quickly in the past two years, thanks to strong growth performance. Substantial job creation has followed years of stagnation. Nonetheless, the economic boom has failed to draw inactive people into the labour market, and unemployment has plunged to below sustainable levels. The short term outlook is clouded mainly by strong excess demand pressures and rising inflation, despite weakening activity abroad. In the medium term, the sustainability of the expansion is also threatened by adverse demographics and persistently low labour force participation.
