Overview: Poland is undergoing a difficult transition from a Soviet-style economy - with state ownership and control of productive assets - to a market economy. On January 1, 1990, the new Solidarity-led government implemented shock therapy by slashing subsidies, decontrolling prices, tightening the money supply, stabilizing the foreign exchange rate, lowering import barriers, and restraining state sector wages. As a result, consumer goods shortages and lines disappeared, and inflation fell from 640% in 1989 to 44% in 1992. Western governments, which hold two-thirds of Poland's $48 billion external debt, pledged in 1991 to forgive half of Poland's official debt by 1994. The private sector accounted for 29% of industrial production and nearly half of nonagricultural output in 1992. Production fell in state enterprises, however, and the unemployment rate climbed steadily from virtually nothing in 1989 to 13.6% in December 1992. Poland fell out of compliance with its IMF program by mid-1991, and talks with commercial creditors stalled. The increase in unemployment and the decline in living standards led to strikes in the coal, auto, copper, and railway sectors in 1992. Large state enterprises in the coal, steel, and defense sectors plan to halve employment over the next decade, and the government expects unemployment to reach 3 million (16%) in 1993. A shortfall in tax revenues caused the budget deficit to reach 6% of GDP in 1992, but industrial production began a slow, uneven upturn. In 1993, the government will struggle to win legislative approval for faster privatization and to keep the budget deficit within IMF-approved limits.

National product: GDP - purchasing power equivalent - $167.6 billion (1992 est.)

National product real growth rate: 2% (1992 est.)

National product per capita: $4,400 (1992 est.)

Inflation rate (consumer prices): 44% (1992)

Unemployment rate: 13.6% (December 1992)

Budget: revenues $17.5 billion; expenditures $22.0 billion, including capital expenditures of $1.5 billion (1992 est.)

External debt: $48.5 billion (January 1992); note - Poland's Western government creditors promised in 1991 to forgive 30% of Warsaw's official debt - currently $33 billion - immediately and to forgive another 20% in 1994, if Poland adheres to its IMF program

Industrial production: growth rate 3.5% (1992)

Electricity: 31,530,000 kW capacity; 137,000 million kWh produced, 3,570 kWh per capita (1992)

Industries: machine building, iron and steel, extractive industries, chemicals, shipbuilding, food processing, glass, beverages, textiles

Agriculture: accounts for 15% of GDP and 27% of labor force; 75% of output from private farms, 25% from state farms; productivity remains low by European standards; leading European producer of rye, rapeseed, and potatoes; wide variety of other crops and livestock; major exporter of pork products; normally self-sufficient in food

Illicit drugs: illicit producers of opium for domestic consumption and amphetamines for the international market; emerging as a transshipment point for illicit drugs to Western Europe

Economic aid: donor - bilateral aid to non-Communist less developed countries, $2.2 billion (1954-89); the G-24 has pledged $8 billion in grants and credit guarantees to Poland

Currency: 1 zloty (Zl)=100 groszy

Exchange rates: zlotych (Zl) per US$1 - 15,879 (January 1993), 13,626 (1992), 10,576 (1991), 9,500 (1990), 1,439.18 (1989), 430.55 (1988)

Fiscal year: calendar year