ISMR November 2021 - Page 27

REGIONAL REPORT

Investment and export opportunities exist in the energy sector as Poland seeks to diversify its energy mix , as well as in defence and digital technologies
Czech Republic 6 %, UK 6 %, France 6 % and Italy 5 %. Poland now ranks as the United States ’ 38th largest export market ,” it added .
Poland is open to foreign investment . Leading sectors have historically included automotive ; aerospace ; information technology hardware and software ; food products ; transportation and pharmaceuticals ; paper production ; appliances and financial services . Poland is a key producer of white goods and passenger cars e . g . the Opel Astra III and IV , the Fiat 500 , the Lancia Ypsilon , the Ford Ka and the Chevrolet Aveo . The construction sector in Poland , a major beneficiary of A view of Warsaw ( Shutterstock . com ). huge infrastructural programmes , has also fuelled demand for steel products .
Investment and export opportunities exist in the energy sector as Poland seeks to diversify its energy mix , as well as in defence and digital technologies . Poland is also a popular location for business processing centres including call centres , shared services centres and research and development operations .
COVID-19 response
The Polish market is characterised by wide population dispersion . A quarter of Poles live in rural areas , while urban dwellers are spread among several population centres including Warsaw and Lódź in the centre of the country , Kraków in the south , Wroclaw and Poznań in the west , Gdańsk and Szczecin in the north and Lublin in the southeast .
“ The well-diversified Polish economy has proven to be one of the most resilient in the European Union ( EU ), with a 2.7 per cent contraction in GDP in 2020 , the first output contraction since 1991 ,” said the World Bank .
“ A sound macroeconomic framework , the effective absorption of EU investment funds , a sound financial sector and better access to longterm credit supported inclusive growth and poverty reduction . Real wage growth and a range of demographically targeted social programmes fuelled robust consumption growth until early 2020 . With an improving business environment , Poland integrated well into regional value chains ,” it added .
However , the COVID-19 pandemic hit Polish industry hard and affected demand for steel and cars , with automotive / steel production and capacity falling in Poland . The unprecedented policy response to mitigate the impacts of the COVID crisis has narrowed the available fiscal space , and a critical challenge is to rebuild this buffer once the recovery is on solid footing . Nevertheless , the full economic and social impact of COVID-19 remains uncertain as new variants emerge .
“ Spending efficiency is needed to rebuild fiscal buffers , accommodate higher spending on health , introduce a green transition and prepare for the growing fiscal burden arising from an aging population . Over the medium term , key challenges are the need to tighten the labour supply , made more acute by the aging populace , and to meet decarbonisation commitments ,” explained the World Bank .
An eye on the future
Visitors at the ITM Industry Europe trade show in Poland .
According to analyst Mordor Intelligence , Poland has a large market equipped with a robust policy framework , a well-developed financial market and an openness to international market for trade , spurred by association with the EU which has helped attract investment in the country . High enrolment rates in higher education , a large population and a competitive internal market helped Poland to diversify its economy .
“ The strong third-quarter numbers support our view that Poland will reach more than 5 % GDP growth for the full year . That is despite the continuing spread of the Delta variant . That strong growth and a vibrant labour market should mean core inflation will remain high . So , we expect more rate hikes , to around 3 %, in Poland and other central European countries ,” said ING economists .
“ Additionally , economic policies across the region will add to inflation . This includes high rises in the minimal wage ( Hungary and Romania ) or fiscal expansion ( Poland , where structural deficit is expected to widen from 4 % to 5 % of GDP ),” they added .
According to the OECD , Poland ’ s GDP is projected to recover by 3.7 %
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