Need a perfect paper? Place your first order and save 5% with this code:   SAVE5NOW

Macroeconomy of Poland and Armenia

The state of the country’s macroeconomics is one of the most important factors determining its success. It places a strong emphasis on the performance of the economy, changes in economic production, the balance of payments, inflation, interest rates, and foreign exchange rates, among many other things. Furthermore, macroeconomics describes the overall behavior of the entire economy, as opposed to the microeconomics of a country, which solely considers the decisions made by individual players in the economy. However, in terms of the overall behavior of a country, the economy is also the most helpful instrument for describing the macroeconomic situation. It accurately depicts the function of companies in an economy since different enterprises employ various production inputs. Notably, after a clear grasp of a country’s macroeconomic situation has been gained, it can be demonstrated that it impacts the investment choice made. Aside from the other business decisions, the decisions regarding the investment of the firm are critical merely for the purpose of verifying the continuation of the firm’s operations. Additionally, business investment geared toward improving the overall economic situation is vital.

Based on macroeconomic variables such as GDP growth rate, foreign direct investment, and financial sector investment, it can be seen that some macroeconomic variables, such as high inflation, are considered to be highly undesirable because they discourage investment due to a lack of business opportunities in the short term. Furthermore, whenever high-interest rates have a variety of consequences for other macroeconomic situations, it is possible to anticipate the investment choice of a company. Consequently, Poland and Armenia are the two nations that have been chosen for this article because their macroeconomic situations have been thoroughly examined and, as a result, have been explored in more depth. Furthermore, based on the macroeconomic understanding of the two nations, a country that would be a good place for investment is identified.

Located in central Europe, Poland, formally known as the Republic of Poland, is a sovereign country with a land area of 120,726 square miles. To the west, the nation is surrounded by Germany; to the south, it shares borders with the Czech Republic and Slovakia; to the east, it shares borders with Ukraine; and to the northeast, it shares borders with Lithuania and the Russian province of Kaliningrad Oblast (Sliwinski, 2017). A unitary semi-presidential representative democratic republic, with the president serving as the head of state, describes Poland’s political organization. Furthermore, agriculture has always played a significant role in developing Poland’s economic system. Most of the land is used for agricultural purposes (more than 60%). Mountains dominate the nation’s landscape, with most of them located in the country’s southern half. Its primary ranges include the Sudetes and the Tatra Mountains, the highest peaks in the Carpathian Mountains and the most elevated region of the Carpathian Mountains. Poland is surrounded on its northern border by the Baltic Sea.

Notably, Warsaw serves as both the country’s capital and its biggest city. When King Sigismund III Vasa relocated his court from Kraków to Warsaw in 1596, Warsaw’s strategic location between the Commonwealth’s capitals of Kraków and Vilnius that Warsaw was designated as the capital of the Commonwealth and the Crown of the Kingdom of Poland, respectively. Furthermore, the zloty is the official currency of Poland as well as the country’s legal tender. It is divisible into 100 grosz units of measure. The Polish zloty is the currency’s name in its most well recognized English translation. Central and Eastern Europe’s most traded currency, the rouble, is ranked 22nd globally on the international currency exchange market. Ultimately, agriculture, manufacturing, and mining have all played a significant role in developing Poland’s economy throughout the past many decades (Rybicka, 1996). Although agriculture and industry continue to play a vital part in the country’s future, they are gradually losing ground to the rapidly growing new initiatives.

Following the country’s macroeconomic situation, the well-diversified Polish economy has shown to be one of the most resilient in the European Union (EU), with a 2.7 percent decline in GDP in 2020, the first production contraction since 1991, and one of the most resilient in the EU. Poland’s GDP dynamics are influenced less by external demand than the GDP dynamics of its surrounding nations in Central and Eastern Europe and less than the GDP dynamics of the countries that make up the European Union; in general, Poland is a country that is considerably less reliant on the global market (Pacek.1994). Even though Poland’s export quota has been progressively growing, it was just 43.1 percent in 2016, making it one of the lowest.

On the other hand, Poland has had consistent GDP growth for the past 25 years, making it the country with the best track record among European countries. It grows at a rate of 4.2 percent every year on average. Like many other nations that went through the change process, Poland saw a significant loss in productivity, which culminated in a period of decline from 1990 to 1991. The economy shrank by a total of 14 percent. It became increasingly gloomy to assess the prospects for the country’s growth, particularly in light of its proximity to its neighbors in the area. However, after those challenges were overcome, Poland proved to be a country where the regained growth was able to continue indefinitely over all succeeding years, as seen in the graph below.

According to the kind of investment, the level of foreign investment in Poland has also changed dramatically in recent years. Technological problems in some circumstances caused this variation, and it was also caused by statistical accounting methodology in other cases. In particular, we refer to the so-called transit capital, the movement of which is carried out as part of optimizing intra-corporate cross-border flow optimization. In contrast to the period 2004-2011, when transit capital was responsible for an overestimation of the cost of foreign direct investment (FDI), the trend since 2012 has been in the other direction. Expansion of foreign direct investment (FDI) began immediately after the country became a member of the European Union in 2004 and continued until the global financial crisis. His development continued until 2013 when he reached his highest point ever. According to the international investment position, cumulative foreign direct investment in 2017 was 235 billion euros. Based on these metrics, Poland is the most successful of the Central and Eastern European countries.

In exportation, Poland’s exports account for little more than 40% of the country’s gross domestic product, according to official figures. Despite this, exports from Poland are doing reasonably well on their soil. Current global rankings for this metric place the state at 27th overall and 25th in the group of the world’s major importing countries, respectively. In terms of imports, Poland now imports $223 billion, ranking it as the 18th largest importer globally. Poland’s imports have climbed from $191 billion in 2012 to $223 billion in 2017. This represents a five-fold increase in five years. The supply of oil and the supply of automobile parts account for the majority of total imports.

Armenia is another country covered in this article. It is a former Soviet republic located in the hilly Caucasus area between Asia and Europe, and it is another country that will be mentioned in this article. It is one of the first Christian civilizations. It is marked by religious buildings like the Greco-Roman Temple of Garni and the Etchmiadzin Cathedral, built in the 4th century and serving as the headquarters of the Armenian Church (Armenia et al., 2007). In the vicinity of Khor Virap Monastery lies Mount Ararat, a dormant volcano just across the border in Turkey, which is a popular pilgrimage destination. As a landlocked country bounded on three sides by Turkey to the west, Georgia to the north, and Azerbaijan to the east, Armenia has a history that predates most European countries by hundreds of years. Yerevan, also known by the spellings Erevan, Erivan, and Jerevan, is the capital city of the Armenian Republic. This settlement is located on the Hrazdan River, approximately 14 miles from the Trapidly during the 20th-century Turkish border. Notably, Yerevan was designated as the capital of the first republic of Armenia after World War I, when thousands of Armenian Genocide survivors who had fled the Ottoman Empire settled in the area following the end of the war.

On the other hand, the city grew dramatically during the twentieth century as Armenia became a constituent republic of the Soviet Union. Like its neighboring Republic of Artsakh, Armenia employs the dramas as its monetary unit, as does the rest of the world. Historically, it was subdivided into 100 luma units. Furthermore, Armenia’s primary food processing exports are alcoholic beverages, fish, cheese, canned fruits, jams, coffee, and mineral water; as a result, its primary industries include brandy, mining, diamond processing, metal-cutting machine tools, forging and pressing machines, electric motors, knitted wear, hosiery, shoes, silk fabric, chemicals, trucks, instruments, microelectronics, jewelry, software, food processing, and pharmaceuticals (Urutyan & Litzenberg, 2010). However, when it comes to Armenia’s macroeconomic situation, The macroeconomic changes in the Armenian economy must be put within a larger framework of economic transformation, institutional and political reforms, and increased openness to regional and global developments.

Following a profound and extended transformative crisis in the 1990s, the Armenian economy has been progressively recovering, liberalizing, and changing since 2000. Since 2001, the Armenian economy has grown at approximately 10%, signaling a significant improvement from the 1990s’ poor performance. Increased inflows of remittances and FDI are contributing to the fast expansion. As in several other transition countries, high growth rates have not been accompanied by high employment growth; in fact, Armenia has experienced jobless growth for a decade, reflecting job redundancies in the public sector due to privatizations and productivity growth in the private sector. Money growth is relatively high, in addition to the current economic boom, meager inflation, and robust remittances.

The observed fall in velocity, unsterilized interventions, the process of de-dollarization2 or ‘dramatization,’ and soaring credit growth and capital inflows all contribute to the extraordinarily high rates of money growth in recent years. The Central Bank of Armenia (CBA) intends to gradually introduce a full-fledged inflation targeting system to minimize inflation and inflation expectations volatility. The initial stages in this process were formalized on January 1, 2006, announcing a 3 percent CPI inflation target. Armenia has a modest open economy, evidenced by exports (and imports) to GDP ranging about 30%. Exports and imports are distributed between CIS nations (approximately one-third) and non-CIS countries (about one-third) (two-thirds). A trade imbalance of 5 to 10% of GDP has been offset by inflows of remittances, FDI, and financial capital (Chobanyan & Leigh, 2006). Remittances are a critical component of the Armenian balance of payments and the Armenian economy.

Finally, while analyzing the macroeconomic analysis of Poland and Armenia and their economic prospects, numerous elements are portrayed that tend to attract investment in one of the two countries. Poland appears to be the finest nation for investment compared to Armenia since it has a solid free trade policy. Notably, Poland is rising and growing economically, which draws investors from all over the world. Furthermore, Poland has several advantages over Armenia that attract international investments, including stable economic development, strong domestic demand, closeness to key European markets, access to highly skilled people, and ever-increasing infrastructure.


Armenia, S., Morabito, G., & Palazzo, S. (2007, May). Analysis of location privacy/energy efficiency tradeoffs in wireless sensor networks. In International Conference on Research in Networking (pp. 215-226). Springer, Berlin, Heidelberg.

Chobanyan, A., & Leigh, L. (2006). The competitive advantages of nations: Applying the “Diamond” model to Armenia. International Journal of Emerging Markets.

Pacek, A. C. (1994). Macroeconomic conditions and electoral politics in East-Central Europe. American Journal of Political Science, 723-744.

Rybicka, E. H. (1996). Impact of mining and metallurgical industries on the environment in Poland. Applied Geochemistry, 11(1-2), 3-9.

Sliwinski, K. (2017). Poland: A nation of the in-between. In European National Identities (pp. 155-171). Routledge.

Urutyan, V. E., & Litzenberg, K. K. (2010). Skills, qualities, and experiences needed for future leaders in Armenia’s food and agribusiness industries. International Food and Agribusiness Management Review, 13(1030-2016-82882), 1-16.


Don't have time to write this essay on your own?
Use our essay writing service and save your time. We guarantee high quality, on-time delivery and 100% confidentiality. All our papers are written from scratch according to your instructions and are plagiarism free.
Place an order

Cite This Work

To export a reference to this article please select a referencing style below:

Copy to clipboard
Copy to clipboard
Copy to clipboard
Copy to clipboard
Copy to clipboard
Copy to clipboard
Copy to clipboard
Copy to clipboard
Need a plagiarism free essay written by an educator?
Order it today

Popular Essay Topics