Why does Polish economy remain resilient in 2023

Despite facing economic headwinds, Poland has demonstrated remarkable resilience, emerging as a thriving and attractive destination for businesses. With a diverse industrial landscape, a burgeoning e-commerce sector, and a pro-business environment, Poland offers a wealth of opportunities for companies seeking growth and expansion.

Economic performance and outlook

Among Central European countries, Poland posted the best economic performance in 2022, despite several successive shocks. Following a rapid recovery from the pandemic, the Polish economy grew 5.1% in 2022, though the economy slowed considerably later in the year. This slowdown can be attributed primarily to high inflation, which eroded real wage growth, and headwinds faced by investment due to soaring energy prices and rising interest rates.

Signs of weakness in the labour market, reflected in a slight rise in unemployment to 5.5% in January 2023 from 5.2% in December. While the government tried to boost purchasing power by raising minimum wages to 15.9% on 1st January 2023, then 3.2% to reach 3,600 zlotys (855.93 USD) in July 2023, the increase in wages in companies is still lagging behind inflation.

Despite the ups and downs in labour market performance, the positive contributions from investment and net exports stand out. All in all, Cynthia Kalasopatan, the market economist at Mizuho Bank, suggests that the Polish economy is likely to escape a recession thanks to country’s economy resilient plus continuous fiscal support from the government. Looking ahead, the nation’s economy should improve from 2024 onwards as inflation falls and the global economy recovers.

Thriving export sectors

Despite the economic challenges, Poland’s net exports contributed positively to growth, as imports fell more than exports. Notably, the country’s vehicle industry, excluding railways and tramways, remain as a significant contributor to export growth.

Poland is rich in natural resources and is an important producer of coal, copper, zinc, construction minerals, and others. Some of the country’s most significant export products include machinery and equipment, metals and metal products, minerals and fuels, chemicals, agricultural products, and textiles. Therefore, companies in these industries will continue to benefit from Poland’s robust export capabilities and tap into Germany, the largest export destination, and other international markets.

Favorable environment for FDI

Poland’s diverse and dynamic industrial landscape has attracted global giants across various sectors, particularly in manufacturing, automotive, and aerospace. Companies like Volkswagen and Lockheed Martin have established operations in the country, creating jobs and fostering the development of local expertise in technology and manufacturing.

Moreover, Poland has become one of Europe’s most attractive destinations for foreign companies seeking to expand their operations. Its business incentives, such as tax exemptions and grants for new projects, have played a crucial role in attracting foreign direct investment (FDI). In 2022, Poland broke records by attracting more than €3.7 billion in FDI, a testament to its appeal as a pro-business environment.

Unleashing Poland’s potential

Whether you’re an entrepreneur seeking new opportunities or a business looking to grow, Poland offers a promising landscape. By leveraging the right financial strategies and tools, companies can capitalize on the country’s potential and tap into the abundant opportunities it presents, especially as the economy is poised for improvement from 2024 onwards.

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