Poland’s Economy: Emerging as a Strong and Stable Market
The economy of Poland is growing rapidly, emerging as an attractive and stable market for international investment. With a population of over 38 million, a growing middle class and highly educated workforce, the country has become a key player in the European Union. From its low-cost workforce to its vibrant capital city of Warsaw, Poland offers both a business-friendly environment and a promising economic outlook.
Poland’s journey in recent years towards greater economic stability has been marked by a number of key changes and developments. This article takes a closer look at how Poland’s economy has evolved to become a lucrative market for foreign investors.
Economic Overview
Since the collapse of the Soviet Union in 1989, the Polish economy has come a long way. From an economic basket case to a model of European economic transformation, the country has achieved impressive economic growth with few signs of slowing.
Poland has maintained low levels of public debt and has the lowest unemployment rate in the European Union. Gross Domestic Product (GDP) has grown steadily over the last decade and the country is expected to continue its strong performance in the foreseeable future.
In 2019, Polish GDP surpassed 500 billion euros. This exceeds that of several broader European nations including Austria, Denmark and Finland.
Reasons Behind Poland’s Economic Success
The Polish economy is driven by a mix of sound fiscal and monetary policies, a well-developed labor market, and a relatively business-friendly environment. Poland is highly connected to the global economy, with a large and diverse trading partner base, including Germany, France and Italy.
In addition, Poland’s industry and manufactures account for over 37 percent of its economy. The country is also a leader in several high-tech industry sectors, such as IT services and software development, biotechnology, and semiconductors.
Investment and Trade
Poland has become an inviting market for foreign investment. The country has adopted a number of measures to attract international capital, such as tax incentives and public-private partnerships. In addition, Poland is consistently ranked as one of the best countries in the world for setting up a business.
Poland currently belongs to the European Free Trade Association and is a member of the World Trade Organization. Free trade agreements have been entered into with the United States and Russia, and bilateral agreements have been concluded with numerous countries, including Turkey, South Korea and China.
Meanwhile, the European Union is the biggest trading partner for Polish exports and imports. Half of the country’s exports, for example, are directed toward other EU countries.
Drop in Local Currency Value
The Polish economy has been affected by the devaluation of the local currency, the zloty. This has led to an increase of imported goods, as the cost of imported goods has become more affordable.
The depreciation of the zloty has also caused a rise in purchasing power abroad, making it easier for Poles to purchase foreign goods and services.
Future Outlook
Going forward, the Polish economy remains on track for steady growth. The country is expected to experience a modest 2.5 percent growth in 2020 and 2.7 percent in 2021 according to the latest International Monetary Fund estimates.
The position of Poland as an export-oriented economy remains strong, with a number of further, necessary economic reforms being implemented.
Poland’s Economic success should not be underestimated. Despite its recent economic woes, the country has enjoyed rapid, positive change as a result of thoughtful fiscal and monetary policies and trade deals. Poland is rapidly becoming an increasingly attractive investment option for international investors, and its future economic outlook is promising.