COMECON: change in net material product 1970-1990

In terms of net material product* (the Soviet version of GDP), industrial growth rates in the Eastern Bloc in the early 1970s were fairly consistent, before a series of conflicts in the Middle East saw oil prices soar and sporadic recessions spread across Europe in the subsequent decade. Poland and Romania experienced the highest growth rates in the early years due to their reliance on Western investment; however, this would prove detrimental in the years to come. Other nations such as East Germany and Bulgaria saw more modest and consistent growth throughout these two decades, although all countries experienced recession with the collapse of European communism in the late 1980s

Poland

The reason for Poland's dramatic decline between 1978 and 1981 was due to the foreign debt accumulated by Poland under the Gierek regime (1970-1980), as the government attempted to modernize Poland's industry and establish trade links outside of the COMECON. As the West prospered, so too did Poland. However, the Recession of 1973-1975 hit the West much harder than the Eastern Bloc. This recession had a knock-on effect on Poland, causing the price of western imports to increase, the demand for Polish exports to drop, and creditors began to demand repayment, which led to further borrowing.

Economic hardship then exposed the instability and ineffectiveness of Poland's industrial sector, and the relatively progressive policies of the Gierek administration allowed trade unions to emerge in ways that were not possible in other Eastern Bloc countries. Solidarity emerged as the most powerful of these trade unions in 1980, with ten million members (of a total population of 35 million) at its peak; the government's implementation of martial law in an attempt to subdue Solidarity's influence then led to further sanctions from the West. As restrictions eased and economic aid arrived from the Soviet Union, Poland's net material product then grew from 1983 onwards. However, it fluctuated on a downward trend until communism's end in June 1989.

Annual change in net material product (NMP) in Eastern European COMECON countries from 1970 to 1990

Characteristic	Bulgaria	Czechoslovakia	East Germany	Hungary	Poland	Romania
1970	7.1%	5.7%	5.6%	4.9%	5.2%	6.8%
1971	6.9%	5.5%	4.4%	5.9%	8.1%	13.5%
1972	7.7%	5.7%	5.7%	6.2%	10.6%	9.8%
1973	8.1%	5.2%	5.6%	7%	10.8%	10.7%
1974	7.6%	5.9%	6.5%	5.9%	10.5%	12.3%
1975	8.8%	6.2%	4.9%	6.1%	9%	9.8%
1976	6.5%	4.1%	3.5%	3%	6.8%	11.3%
1977	6.3%	4.2%	5.1%	7.1%	5%	8.7%
1978	5.6%	4.1%	3.7%	4%	3%	7.2%
1979	6.6%	3.1%	4%	1.2%	-2.3%	6.5%
1980	5.7%	2.9%	4.4%	-0.9%	-6%	4.2%
1981	5%	-0.1%	4.8%	2.5%	-12%	-0.4%
1982	4.2%	0.2%	2.6%	2.6%	-5.5%	4%
1983	3%	2.3%	4.6%	0.3%	6%	6%
1984	4.6%	3.5%	5.5%	2.5%	5.6%	6.5%
1985	1.8%	3%	5.2%	-1.4%	3.4%	-1.1%
1986	5.3%	2.6%	4.3%	0.9%	4.9%	3%
1987	5%	2.1%	3.3%	4.1%	1.9%	0.7%
1988	2.4%	2.4%	2.8%	-0.5%	4.9%	-2%
1989	-0.4%	1.3%	2.1%	-1.1%	-0.2%	-7.9%
1990	-13.6%	-3.1%	-19.5%	-5.5%	-13%	-10.5%

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Release date

1993

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Region

Bulgaria, Czechia, Hungary, Poland, Romania, Slovakia, German Democratic Republic, CEE

Survey time period

1970 to 1990

Supplementary notes

*Net Material Product (NMP) was the main key economic indictor used in planned economies throughout the twentieth century (Soviet/COMECON states). NMP is calculated in a similar way to GDP, however NMP focuses on tangible output and excludes many of the factors included in GDP, such as the output of service sectors, and spending on healthcare, state administration, and defense.

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