Karpacz Forum, Eastern Europe's growth is a mirage

Demographic decline is 'inflating' economic growth in Central and Eastern Europe, masking a structural weakness that risks stalling convergence with the West. This is the warning issued by the SGH Report, presented at the opening of the 35th Karpacz Economic Forum in Poland. The study, compiled by over 50 academics from the Warsaw School of Economics (SGH), examines the entire regional bloc, highlighting how Poland accurately reflects - and amplifies - the critical issues facing the whole area. The analysis reveals a veritable regional statistical mirage. Between 2004 and 2025, Central and Eastern Europe's per capita GDP rose from 40 per cent to 58.4 per cent of that of the United States. However, more than half of this surge is not due to a real increase in wealth, but to the drastic decline in the population of the entire bloc. If the region's population had grown at the same rate as that of the United States, real per capita income would today stand at just 46 per cent of the US figure. Experts warn that the model based on low labour costs has run its course, trapping the region in a 'patchwork capitalism' heavily dependent on foreign inputs. Within this context, the focus on Poland - the largest economy in the group - highlights the immediate risks: in the EU Health Resilience Index, Warsaw has plummeted to 22nd place out of 27, overtaken by regional neighbours such as Slovenia and the Czech Republic. The labour market transition is also stalling, with a surplus of as many as 810,000 underutilised workers in the Polish agricultural sector alone. Among the macroeconomic solutions proposed by the SGH Report for the entire region, the recommendation to introduce a 3 per cent digital tax on tech giants stands out; a measure which, applied to the Polish market alone, could yield up to 4 billion zloty (approximately one billion euros, ed.) a year to be reinvested in the country's structural reforms. ALL RIGHTS RESERVED © Copyright ANSA