Poland welcomed its largest wave of greenfield FDI in 2017 since the global financial crisis, securing 343 projects valued at $14.9bn and creating 88,000 jobs, according to fDi Markets. The eastern European powerhouse is set to make a repeat performance in 2018, with 199 projects received between January and August, only eight less than in 2017.
Poland’s economic success story was confirmed in September 2018 by its qualification as one of the 25 most developed economies in the world, according to the FTSE Russell Index agency.
In early 2018, demand for Poland’s industrial and warehouse market hit 2 million square metres, the country’s best ever result and the third best in Europe, according to a report from real estate investment manager JLL.
“Poland has had constant economic growth for 25 years now. We didn’t have a recession in 2008. [Poles] wanted to fill the gap between Poland as a post-Communist country, and western countries, as soon as possible,” said Piotr Sawicki, director of the Economic Development Department in Warsaw.
Much of this growth has been driven by foreign investment, most of which has gone to Warsaw.
“The combination of [cheaper] salaries, compared to western Europe, and high quality employees is making Poland [a winning choice for FDI],” says Rafal Kulczycki, director of Krakow’s City Development Department.
The strongest sectors in many parts of Poland are the business process outsourcing and shared service center sectors, especially Warsaw and Krakow. The latter has been the Europe’s largest centre for outsourcing services since 2014, and now boasts more than 170 companies and 70,000 employees.
“JP Morgan and Goldman Sachs recently entered Warsaw. We want to attract these sort of investors, and put more stress on tourism”, says Mr Sawicki. “Another opportunity is Brexit. We see lots of companies interested in moving their offices, not necessarily their head or front office, but back offices to places like Warsaw.”
Regarding whether Poland’s ruling Law and Justice party (PiS) was a positive force for FDI, Mr Sawicki said: “I think that no matter who rules the country, everybody knows that [foreign] investments are important. When you look at the economy, it is still growing, and nothing changed when PiS began ruling.”
Although greenfield FDI was excellent in 2017, it is worth noting that mainstream foreign investment into Poland - in terms of capex - fell by half compared to 2016, partially due to the outflow of Dutch investors and the purchase of Bank Pekao SA.