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The Warsaw Voice » Business » June 29, 2012
Business & Economy
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Exports Still on the Rise
June 29, 2012   
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The eurozone crisis has not harmed Polish exporters. Last year, Polish exports reached a record value of 138 billion euros, according to the National Bank of Poland.

In the past two decades, Polish exports have been growing steadily, with only one exception: the year 2009, when Europe was hit by the global financial crisis. Since that time, Polish exports have already increased by a third. In the past eight years, export growth has been especially impressive. In 2004, the first year of its membership of the European Union, Poland sold on foreign markets products worth barely 66 billion euros, less than half last year’s figure. The Central Statistical Office (GUS) has calculated the value of Polish exports in 2011 at 136 billion euros. If one adds the value of small-scale border-zone trade, which escapes the customs statistics examined by GUS, the value of exports likely reached the 138 billion mark estimated by the central bank.

What contributed to this sharp increase in exports? The main factor was foreign direct investment, which came to almost 10 billion euros last year alone. Western automotive companies and producers of consumer electronics and household appliances have built many plants in Poland in recent years with a view to selling their output throughout Europe. Companies that have been present in Poland for a long time are reinvesting their profits here and taking new loans to expand their plants. After a few years, this leads to a rise in exports. Thanks to a weak zloty, border-zone trade also grew last year. Slovaks and Lithuanians were among those who came to Poland to do their shopping. More than three-quarters of Polish exports go to the markets of European Union countries, with Germany the most important trade partner. Many businesses operating in Poland, both subsidiaries of foreign corporations and wholly Polish firms, supply German producers with components and semi-products. German consumers, who are enjoying the best labor market situation in many years, were also eagerly buying Polish products last year. As a result, Poland managed to sell 35.4 billion euros’ worth of goods on the German market, 12.5 percent up on 2010. Polish businesses are also interested in strengthening their position on markets in the East. In 2011, they sold goods worth 11.5 billion euros, 18 percent more than a year earlier, to Central and Eastern Europe. Exports to Russia, Poland’s sixth-largest trading partner, increased by as much as 22.1 percent. The food, automotive, machine-building, electrical, electronics and chemical industries are the main exporters.

According to the research firm AutomotiveSuppliers.pl, the value of cars and parts exported from Poland last year could have reached 19 billion euros, the highest figure ever.

Polish food was also selling very well on foreign markets, with the value of food exports estimated at 15 billion euros, three times more than before Poland’s EU entry. The Export Credit Insurance Corporation (KUKE) has estimated that Polish exports will be more than 10 percent higher this year than in 2011. “Polish exports to eastern markets are growing rapidly,” KUKE President Zygmunt Kostkiewicz says. “The star of the last two years was Belarus, but exports are also growing fast to Russia, Kazakhstan and other countries of Central Asia. We sell in the East anything that can find buyers there, from food to consumer goods like furniture, investment goods, machines and equipment. As regards long-term contracts, our flagship exports are turn-key industrial plants, retail premises and hotels.”

The government’s exports support program, in effect for one-and-a-half years, helps Polish exporters conquer foreign markets. Thanks to loans from BGK Bank, the main operator of the program, Polish businesses can offer their foreign partners cheaper financing without the risk of non-repayment. By the end of 2015, BGK is going to provide zl.5.7 billion in loans.

International financial institutions also project a rise in Polish exports. In a second set of economic forecasts, HSBC Bank and the research firm Delta Economics predicted that the value of Polish trade will increase by 110 percent in 15 years. In their first release in October 2011, HSBC and Delta experts projected a 73-percent growth in the value of global trade to $48.5 trillion in 15 years. Now, they expect that by 2016 the value of global trade will reach $53.8 trillion, 86 percent more than this year.

Global trade prospects have improved because the eurozone financial crisis has eased and the developing economies are not slowing down as sharply as expected. At the same time, due to the eurozone crisis, HSBC and Delta Economics revised downwards their projections for growth in Poland’s foreign trade.

Last autumn they forecast foreign trade would increase 125 percent within 15 years. Now they predict Polish exports will rise 110 percent.

Poland’s share in global trade is expected to rise from 1.3 percent to 1.5 percent. The automotive and electronics sectors, which are dominated by foreign-owned companies, and the agri-food industry are expected to be Poland’s leading exporters. Polish exports to African, Asian and Latin American countries are expected to grow the fastest, though often from a low level. The strategy is to offer a timely response to the economic slowdown in the West.
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