An annual delegation from the IMF visited Poland October 8-17 to discuss the country’s economic developments and policies with officials and collect financial information.

Speaking to TVP World’s business program ‘The Bottom Line’ Gottlieb said that the delegation had concluded the model based on firms investing in Poland because of low labor costs, which had brought tenfold growth over three decades, has to change. “Poland has a suspiciously low investment level and that's going to be critical to raising Poland's productivity going forward,” Gottlieb said.

“The economic model growth model in Poland is based on a flow of foreign direct investment into the export sector, taking advantage of access to the EU market. In particular, those firms have taken advantage of the well-educated population being competitively priced,” he added.

This has been very successful and led to 20% real income growth from 2019 alone, Gottlieb continued.

However, he sees that changing. “Labor is now more expensive in Poland, raising some questions about the ability to continue to attract foreign direct investment.”

Gottlieb says those wage rises need to be matched by a growth in productivity to ensure Poland’s competitiveness relative to other countries.

The IMF delegation also said that Poland must encourage growth in its own start-ups with the support of private equity and venture capital in order to improve its technological competitiveness.

However, the financial sector in Poland is struggling to raise finance for innovative firms. Banks currently face a number of issues ranging from having to finance credit holidays for overstretched mortgage holders struggling with high interest rates to massive customer litigation following a ruling that voided foreign currency mortgages.