March 27, 2014
Polish companies sold a record 152.8 billion euros worth of goods and services abroad last year, and forecasts for the coming years are equally promising. Exports are expected to remain a driver of the Polish economy.
Poland’s exports increased by 6.5 percent in 2013, mainly because Polish companies are increasingly eager to enter new markets, looking for an alternative to crisis-stricken eurozone economies. The value of Polish exports exceeded 150 billion euros last year for the first time ever, Deputy Prime Minister and Economy Minister Janusz Piechociński told the Newseria Biznes news service. “Importantly, this was achieved with a much lower increase in exports to eurozone countries,” Piechociński said.
Poland’s main export markets are in other European Union countries. The EU as a whole absorbs three-quarters of Poland’s total exports. Exports to EU countries increased by 4.5 percent last year, while sales in eurozone countries grew by about 3.8 percent.
Germany is the most important export market for Polish companies: 38.2 billion euros worth of Polish goods and services were sold there last year, 5.2 percent more than in 2012. Britain is next on the list. The British market is gradually being “discovered” by Polish companies, in part because many of the goods shipped there are chiefly intended for Poles living and working in Britain. Polish companies are also increasingly exporting their goods and services to the Czech Republic.
With each month Polish exports are growing fast on emerging markets and in Central and Eastern European countries such as Russia, Ukraine and Belarus. Poland’s exports to emerging markets increased by 25.5 percent last year, and those to Central and Eastern Europe grew by 19.3 percent.
Polish goods are increasingly popular in non-European countries. According to Piechociński, this is because Polish businesses are keen to find new export markets, and also helpful are efforts by the Economy Ministry, several government agencies and Polish diplomats. “We need to continue with these processes,” Piechociński said. “That’s why programs such as Go China and Go Africa and dynamic increases in sales of Polish goods in Arab or Islamic countries are so important.”
According to Monika Piątkowska, vice president of the Polish Information and Foreign Investment Agency, good credentials are an important factor on Asian and African markets. If a head of government or head of state takes a business mission with them on a trip abroad, which has practically become the norm recently, then participation in such a delegation is something of a certificate of credibility for businesspeople eyeing a new market.
Another element of support from the government administration is information for Polish businesses about foreign markets, as well as information for foreign businessmen about the Polish economy and companies operating here. This is primarily done through the Go China and Go Africa programs being carried out by Polish government agencies. These programs enable businesses to get an insight into how to do business on these markets. Finally, support is provided by a range of government agencies and government-related institutions when specific deals are made.
The government has announced plans to open a commercial office in Dubai this year to cover East African countries such as Ethiopia, Kenya, Tanzania, Rwanda and Uganda. Further Polish business missions are also planned in Africa, this time to Kenya, Tanzania, Senegal, Angola and Mozambique. A Polish-African Congress will also be held there, probably in Ethiopia.
“African countries in particular have enormous potential for both Polish exporters and companies thinking of investing on these difficult markets in the future,” Piątkowska told the Newseria Biznes agency. “We have a chance to deepen our cooperation with Africa, and Polish companies are already beginning to take advantage of it—not just the big market players, but also small and medium-sized enterprises.”
Meanwhile, the Economy Ministry has identified several other prospective markets: Brazil, Canada, Algeria, Turkey, Kazakhstan, and Mexico. It says Polish companies have great potential for development there, in terms of both exports and, as the next step, to set up businesses there, build a sales network, and invest on these markets.
However, Poland is a member of the OECD, and this imposes certain limitations on the Polish government when it comes to state aid.
Investment by foreign companies in Poland boosts the development of Polish exports. Therefore many say the government should also focus on attracting foreign capital to this country. Foreign investment opens new markets for Polish exporters, leads to an increase in workforce skills and helps spread good business practices. Foreign investment, especially by multinationals, is also an opportunity for many smaller companies and suppliers.
All the indications are that exports will continue to be a driver for the Polish economy. Over the past 25 years, Polish exports have increased tenfold under a free market in Poland. Since 2000 alone, the volume of exports has tripled. The ratio of exports to GDP is currently around 46 percent, up from 27 percent in 2001.
A report by the Polish Agency for Enterprise Development (PARP) and the Małopolska School of Public administration suggests Polish exports will rise by up to 15 percent in the first half of 2014. According to Piątkowska, Polish exports will be growing at a rate of 8-10 percent a year until 2020. “However, exports will lose their importance as a driver of the economy—investment and domestic demand will simply begin to play a greater role,” Piątkowska said.