Consumers associations

Office for competition and consumer protection (UOKIK)

Polish consumer association (SKP)

Consumption expenditure
Purchasing power parity 2004 2005 2006
Purchasing power parity (Local currency unit per USD) 1.82 1.81 1.79
Source: World development indicators, World Bank.
Definition: Purchasing power parity is the number of units of a country's currency required to
buy the same amounts of goods and services in the domestic market as USD would buy in the
United States.

Household final consumption expenditure 2005 2006 2007

Household final consumption expenditure (Million USD, constant
123,907 130,343 137,911
price 2000)
Household final consumption expenditure per capita (USD, constant
3,247 3,417 3,618
price 2000)
Household final consumption expenditure (annual growth, %) 2.0 5.2 5.8
Household final consumption expenditure, etc. (% of GDP) 61.8 61.6 60.0
Source: , last available data

Consumption expenditure by product category as % of total

1999, latest available data
expenditure

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Last updates: October 2009
SOURCE
World Development Indicators database
DEFINITION
Household final consumption expenditure (formerly private consumption) is the market value of
all goods and services, including durable products (such as cars, washing machines, and home
computers), purchased by households. It excludes purchases of dwellings but includes imputed
rent for owner-occupied dwellings. It also includes payments and fees to governments to obtain
permits and licenses. Here, household consumption expenditure includes the expenditures of
nonprofit institutions serving households, even when reported separately by the country. This
item also includes any statistical discrepancy in the use of resources relative to the supply of
resources. Data are in current U.S. dollars.

The economic changes that began with the fall of communism in 1989 have helped
Poland to establish one of the strongest economies in Eastern Europe today. Not all parts of
society have benefited equally from the positive economic picture however. Those who are
unemployed, living on a pension, single parents, or residents of rural communities are “at risk”
of living in poverty in Poland’s new economic environment. One of the changes that have
allowed many to weather the economic fluctuations is the emergence of consumer credit.
Credit can now be used to purchase homes, cars, durable goods, or to finance a more
comfortable life-style. For some credit is used to improve their standard of living knowing that
their future earnings can afford them to borrow today. For others though credit is used to help
make ends meet. In this paper I explore what factors influence the likelihood that a household
will use consumer credit in the form of loans.

Poland has the highest unemployment rate in the European Union (EU), according to a June 11,
2007 Associated Press (AP) story posted on the website of the Boston Globe (Boston)-estimated
at 13.1 percent in May 2007.
So why is the international financial press full of reports of booming consumer spending in the
former Soviet satellite?
The short answer is that Polish consumers are better off than they have been since the end of
World War II. The longer answer looks at some of the fallacies behind headlines such as that of
the AP story cited above: "Consumer Boom Spurs Polish Economy."
The first exception to take with the `consumer boom' idea is that the EU has been steadily
lavishing development funds onto the Polish economy. This has allowed Polish industry to grow,
and with that Polish exports grew as well.
Consumers are a little late to that party. Perhaps a better way of looking at Poland's consumer
economics is to say that the EU's development efforts have now made it possible for the
country's consuming class to be more visible and active.
The AP story said that Poland's GDP grew at a rate of 7.4 percent for the first three months of
2007, the best showing since the second quarter 1997. The AP also estimated 2006 GDP growth
at 6.7 percent, a very different estimate than the International Monetary Fund (IMF) is using,
which is GDP expansion at 5.8 percent. The AP doesn't say which of the assortment of GDP
estimates it uses. The IMF relies on constant prices. Possibly the AP is using current prices.
The point is that there is a clear effort to characterize Poland's achievements as more than the
reality of the situation warrants.
And this becomes clear in recent consumer survey results published by the highly respected
Nuremberg based Gfk Group, the world's fourth largest market research firm.
In May 2007, Gfk asked 1,000 Polish consumers the following question. "Is your household's
financial situation better, worse or about the same as it was 12 months ago?" Some 60 percent of
respondents said their situation was the same.
By way of comparison, only 39 percent of respondents in Romania answering the same question
chose `the same.'
Then Gfk asked, "What are your household's financial expectations for the upcoming 12
months?" And 57 percent of respondents replied, `the same.'
But when Gfk asked, "What is your opinion about the situation of the unemployment in your
country for the next 12 months," some 42 percent of respondents answered, `somewhat worse.'
Finally, Gfk asked, "What is your household's present financial situation?" Consumers, 66
percent of them, answered: "We can barely make ends meet." Does all of that sound like a
"consumer boom" to you?
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