Poland Creates Opportunities For All Entrepreneurs

Of course, indirect factors are important as well, such as macroeconomic parameters, the stability of the tax system and financial system considerations. These, too, form a framework which ensures that an investment in the given country makes sense.

What about inflation, should it be feared?

Inflation is not something that exists exclusively in our country, the entire world is struggling with it today. What is important, however, is that a downward trend in inflation has been observed for some time now. The role of monetary policy is to bring inflation down as much as possible, while maintaining economic growth and the stability of the economy.

Should it be feared? No, as according to all the forecasts, it should drop significantly within a year or two. It should be stressed, however, that current inflation results from high energy prices, which in turn are a consequence of the outbreak of war in Ukraine and Putin’s actions. It is nonetheless the task of fiscal policy to achieve the inflation target.

Foreign investments bring benefits to Poland and, of course, to investors. Let’s take a different perspective: how does Europe benefit from having them located in our country?

First of all, Poland is a much more attractive country for investors today. Recent years have seen a strong inflow of foreign direct investment, which shows, among other things, their confidence in macroeconomic policy. It would be worthwhile, however, to start with events of the recent past. One good measure would be how much direct investment is flowing into Poland and how it compares to the GDP. After the pandemic, this ratio remains on the level of 3–4 percent, so quite high. This shows that foreign investors perceive Poland as an attractive and safe place to invest capital. They are confident that implemented projects would be profitable, i.e. yield not only a payback, but also a profit. This in turn is good for the economy, as it is difficult to withdraw from a foreign investment overnight.

This was not always the case, though. After the 2008 crisis, the ratio of foreign direct investment to GDP in our country was in the range of 1–2 percent. It accelerated after the pandemic, when deglobalisation, shortening of supply chains, and thus relocation of production mostly from Asia closer to the target customers and decision-making centres, became important. In terms of the Old Continent, this was primarily relevant for Central Europe, including Poland, which stands out as attractive in comparison to its neighbours. Western players are increasingly relocating their production here, as can be seen in the FDI statistics. Investing in Poland ensures stable and secure supply chains. Moreover, it fosters cooperation between Central European countries, Poland, and Western countries. It is taking on a new relevance.

What kind of stimulus for the Polish economy might be provided by the reconstruction of Ukraine and what could Poland’s involvement in this process be?

First and foremost, the question must be asked as to when and how the war in Ukraine will end. This is important from the perspective of Ukraine’s macroeconomic stability and military security. Ukraine needs to be safe for its reconstruction to begin. If the conflict keeps smouldering and the matter is not closed, investors will be convinced that putting money in Ukraine is inadvisable. Same goes for aid programmes financed by EU or global funds. They will not be launched until it is guaranteed that the conflict is over.

As for our country, the reconstruction of Ukraine is very important to us, not the least from the perspective of economic stability. So it will be good if Ukraine becomes a place of economic growth and does not remain a black hole, generating only risks.

It should also be stated clearly that the reconstruction of Ukraine will represent an opportunity for Polish companies. They can benefit from this process. It is, of course, very complicated, because the question remains who will be the first to take responsibility for supporting Ukraine in the reconstruction process. One can expect competition between countries who, while contributing, will expect their companies to be the first to step in and start making investments. Ukrainians themselves will also seek to ensure to have local operators benefit from the reconstruction process as much as possible.

Many signs indicate that it may occur sooner than originally thought. There are voices claiming that international actors are not ready for the war to drag on for years. That is why it is necessary to prepare for investing in Ukraine even now.

In what direction will internationalisation of the Polish economy proceed? And to what extent?

It is already internationalised. Polish companies open their branches abroad and export goods and services to more and more new markets, not only European but also global. Polish companies abroad are thus growing stronger every year. Successive entities are acquiring competences necessary to expand their operations outside the country. This, in turn, translates into economic growth and affluence for Polish citizens.

It is certainly easier to build foreign expansion in neighbouring countries, or more broadly, in the European Union, than in remote markets such as Asia or Africa. Conquering remote markets requires investment support from various institutions, such as the Export Credit Insurance Corporation (KUKE), the Polish Investment and Trade Agency; the mechanisms available to the state must be mobilised in order to open doors for business in other countries.

Poland’s economy is seen as an attractive one. This is evident from the inflow of foreign direct investment, which accelerated significantly after the pandemic. That is why domestic companies which had been thinking about expanding abroad often wonder whether this is the right time, since in Poland they can still count on high margins, i.e. good profits – often better than in other well-developed countries. And breaking ground in new markets is always fraught with risk.

Besides that, Polish market is large and characterised by low unemployment. For many domestic companies, this is becoming an incentive to stay put for the time being.

However, the wealthier our country becomes, the closer it gets to its Western neighbours, the more competitive the internal market is going to become, impacting the margins, and the more entrepreneurs will eventually decide to look for other markets, as this will be the way to further consolidate their position, to grow stronger.

What makes Poland stand out on the world map today and what do you predict will make it stand out at the end of this decade, i.e. in 2030?

The economy, I believe. It has many areas of strength. This strength of the Polish economy is definitely founded upon Polish companies, whose qualities allow them to pass smoothly through periods of turbulence. They have a certain level of risk aversion, they make sure to keep a robust level of margins, they are careful about the level of debt, they have a financial base, because they fight for safety buffers. This makes them stable from the perspective of long-term growth.

At the same time, the Polish economy still has plenty of resources for growth. In the eyes of Western companies, Polish firms appear as those who can do everything faster and with a better customer focus. They are more flexible than their Western competitors. They are better able to adapt to the situation. With this, they also win when foreign companies are looking for cooperation partners. Therefore, deglobalisation, perceived as a threat to the global economy, for the Polish economy is an opportunity. Polish companies, with their strength, can take benefit from it, as they adapt to new conditions and realities easily. Therefore, in response to the question of where Poland is going to be in 2030, I would say that it will be at a stage of stable growth which will bring us closer to the most developed economies in Europe. In fact, recent years have shown that we are on that exact path. This trend will only intensify in the coming years.

Jacek Pochłopień