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The Warsaw Voice » Business » July 30, 2012
Business & Economy
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FDI Still Flowing In
July 30, 2012   
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Poland continues to attract foreign capital. According to the latest World Investment Report by the United Nations Conference on Trade and Development (UNCTAD), in 2011 Poland recorded strong growth in foreign direct investment (FDI), which reached $15.1 billion, 70 percent more than in 2010. This was the third best result in the history of foreign investment in this country, after 2007 and 2006, widening the gap between Poland and its competitors in the region. Poland leads the way in Central and Eastern Europe in terms of FDI inflow, ahead of the Czech Republic and Hungary, both of which attracted roughly three times less investment.

The 70-percent increase in Poland’s FDI figure is particularly high compared with the global average of 16 percent and is considered to be an excellent result because Poland’s FDI inflow for the first time exceeded the average level from before the crisis. According to UNCTAD forecasts, global FDI inflows will grow moderately in the coming years.

According to the Polish Information and Foreign Investment Agency (PAIiIZ), Poland’s FDI performance may worsen in the years ahead as a result of less European Union funds flowing into the country, new restrictions on combining different forms of state aid, and the approaching end of the country’s special economic zones, which are scheduled to run until 2020. However, the number and value of projects handled by the agency show no signs of declining. In the first half of 2012, the agency says it “completed” 27 investment projects with a total value of almost 800 million euros.

The largest number of new investment projects involved the automotive industry. This should come as no surprise because for years Poland has been a leading manufacturer of cars and parts and components for car production. Parts for virtually all European car makes are produced in Poland.

The automotive industry has become one of the pillars of the Polish economy and a driver of Polish exports. The only worry for car manufacturers is that only a small fraction of their products reach the domestic market, while 97 percent of the cars produced in Poland are shipped abroad. The same goes for components and parts. And these are no small exports. It is estimated that the value of Poland’s automotive exports reached 19 billion euros last year. In the coming years this figure is likely to increase further. An automotive sector study by consultancy firm Deloitte shows that Poland will remain an attractive destination for new invesstment projects in the automotive industry for at least another five to 10 years.
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