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The Warsaw Voice » Other » March 12, 2008
Germany in Poland
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German Investors Still Keen on Poland
March 12, 2008   
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Germany is Poland's largest commercial partner globally, while Poland is Germany's biggest trade partner in Central and Eastern Europe. Since Poland's entry to the European Union in May 2004, Polish-German trade has gained momentum. In 2004, it grew by 7.8 percent; in 2005 it increased by 9.2 percent, and in 2006 it rose by 26.4 percent.

Data by Germany's Statistisches Bundesamt office show that Polish-German trade amounted to 38.8 billion euros between January and August last year, growing by 21.8 percent in comparison with the same period in 2006. In 2006, German exports to Poland totaled 29 billion euros, while Polish exports to Germany reached 21.2 billion euros. Key Polish exports to Germany include machines and vehicles, household appliances, foodstuffs and furniture. German exports to Poland are dominated by machines, equipment, vehicles, chemicals and plastic products.

German investment in Poland
Germany figures prominently among the largest foreign investors in Poland. In 2006, German investment in Poland came to 2.7 billion euros, accounting for about 18 percent of total foreign direct investment (FDI) here, which exceeded 15 billion euros, according to data from the National Bank of Poland (NBP). Overall, Germany is second on the list, behind the Netherlands, in terms of cumulative FDI in Poland, with 15.5 billion euros invested between the start of market reforms in Poland in late 1989 and the end of 2006.

According to data by the NBP and the United Nations Conference on Trade and Development (UNCTAD), Germany was second in terms of the number of investment projects in Poland carried out between the beginning of last year and October, behind American and Japanese investors who tied in first place. In 2007, German investors carried out six major projects piloted by the Polish Information and Foreign Investment Agency (PAIiIZ), tying in second place with British investors in this respect, behind the Americans and Japanese who topped the league table together.

Most German investment in Poland is concentrated in industries such as automotive production, engineering, chemicals, pharmaceuticals, banking, insurance, wholesale, retail, and energy. Around 2,700 large German firms were on an official list of foreign investors compiled by the NBP as of the end of 2006. In addition, there were many projects carried out by small- and medium-sized German investors, mainly in border regions. Including those projects, Germany remained the largest foreign investor in Poland in terms of both value and number of projects.

German investors in Poland are especially interested in regions such as Lower Silesia, Łódź and Małopolska. They also invest in special economic zones (SSEs) in areas near the German border.

For German firms, Poland's greatest advantages as an investment destination include its fast economic growth combined with a large and expanding market of 38 million consumers, in addition to manifold advantages stemming from the country's membership in the EU. These include legal regulations aligned with EU standards and financial aid from EU coffers. Other advantages include tax breaks available in SSEs and highly qualified staff. Polish labor is sought after not only by German investors in Poland, but by the German economy as a whole, as it increasingly opens to workers from Poland.

Katarzyna Soszka-Ogrodnik
Press Officer Polish-German Chamber of Industry and Commerce


Factfile: The German economy
The German economy grew 2.5 percent last year. This year German economic growth is expected to decelerate to around 1.7 percent as a result of an economic slowdown in the United States and downward trends on international stock markets.

In other key macroeconomic developments last year, inflation in Germany reached 2.3 percent, rising to its highest level since 1994. However, the country reported a zero budget deficit, for the first time since 1969. The German service sector is growing rapidly, and industry is experiencing a recovery. The Association of German Chambers of Industry and Commerce (DIHK) expects that some 300,000 new jobs will be created in Germany this year, including 100,000 in industry alone. A comparable number of new jobs was created in German industry last year. However, much as in Poland, an outflow of professionals may obstruct the development of the German labor market.
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