Inflation remained high, but continued the trend of decreasing from the previous year. Other important economic trends were positive as well. The Polish trade deficit decreased substantially from that of the previous two years, due largely to increased exports to the Former Soviet Union. The Government has also held the line against increased deficit spending.
Some problems remain, however.
Progress on privatization and other structural reforms has been slow and uncertain. A number of sectors highly attractive to foreign investors, including telecommunications and tobacco, remain unprivatized. In 1990 and early 1991, Poland took bold steps to stimulate its private trading sector through an open trade regime with low or suspended tariffs. Since mid-1991, however, protectionism has grown and Poland's trade relationship with the United States has suffered. Poland raised a large number of its MFN tariffs in August 1991, but the effect of this increase on U.S. exports was minimal as most tariffs remained suspended.