Polish economy and currency rate

Polish economy and currency rate
Life in Poland becomes more and more similar to other European cities. After the fall of Communism, the Poles learnt to adjust to rules of capitalism – many of them founded companies, became entrepreneurs and experiences the hardships but also blessings of the new reality of the country. There are, however, also people who find it hard to live in today’s Poland that deprived them from the feeling of security of having a governmental job and the basic funds for a living. Before they had poorly paid job – now they must fight to have one at all.

When in 2004 Poland joined European Union, there had been going on many disputes about advantages and disadvantages of this decision. A lot has changed since then – some laws needed to have been adjusted to EU standards, new markets opened, Poles gained access to some of the countries without a need of visa. But there are still a lot of new things coming – one of them is a change of currency from Polish Zloty to Euro. Many perceive it as one step too far and foresee a sudden rise of prices and overall cost of living. But it is Polish Zloty, that strengthens and weakens, that causes now many troubles to entrepreneurs dependant on foreign markets.

One of the examples of people who monitor the exchange rate of Polish currency are Poles who work abroad. For many of them staying away from Poland is only temporary period during which they plan to gain resources for their families or their future plans like getting married or buying an apartment. Many of them also send money home to support those whom they left in the country. Rising and falling rate of zloty makes a difference for them when exchanging money. What they earn abroad might be worth much more or much less back in Poland.

An important field that is also dependant on exchange rate is tourism. Foreign visitors must exchange their money into Polish currency – and although the prices in Poland will not change drastically within one month, the exchange rate might. Tourists from abroad paying for a hotel room might have the feeling that although the accommodation costs the same as before (when comparing prices in Polish Zlotys) they must pay more or less than they perceived.

At the beginning of 2008 Polish Zloty started to strengthen significantly, which meant that Polish economy is in a good shape. However, foreign tourists did not take it as an advantage – for a certain amount of Euros or US dollars they could buy much less than before. Cities like Krakow or Gdansk – for which tourism is an essential part of the budget – started to face problems with decrease in number of visitors. Hotels and restaurants, missing vacancies in 2007, seemed to be abandoned. But when the global financial crisis of 2008 came, the overall situation influenced also Polish economy. Polish Zloty (PLN) became weaker and EUR or USD reached its previous purchasing power. The authorities of tourist destinations in Poland hope to gain back the visitors that they lost before.

Although global financial crisis brought a lot of insecurity to the world, there are still some industries that might benefit from this state of affairs. During weakness of PLN, the tourists find Poland financially attractive as foreign currency has stronger purchasing power. The change of currency in Poland, from zloty to EUR, might on one hand bring more stability in Polish economy but will at the same time deprive some groups of people from profiting on exchange rate.

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