Poland’s investment future is looking bright, according to the latest report released by the United Nations Conference on Trade and Development (UNCTAD). Although the value of direct foreign investments in Poland dropped by around 7 percent to $10.1 billion in 2020 due to the pandemic, the prospects for so-called greenfield investments (those made from scratch) are still strong.
In 2021, it was announced that 465 such greenfield initiatives were to be completed in Poland, compared to 448 in 2019. Their nominal value is $24.3 billion, which is the largest number of such investments in history and their value is the third-highest result.
Poland’s share of direct foreign investment projects carried out in the EU has been systematically growing over the last few years. Experts underline that the pandemic has strengthened this trend, but there are other important factors in play.
“I believe that we were helped by Brexit, improved infrastructure (especially transport infrastructure) and the rise of Polish competitiveness. The individual costs of labor in Poland are growing slower than in other economies. Companies are aware that the increase in labor costs in relation to an increase in productivity is lower in Poland than in other countries of our region,” said PKO BP bank’s main economist, Piotr Bujak.
He noted that Poland mainly competes for investors with other Central and Eastern European countries.
It is also possible that the freezing of the global economy in 2020 brought other benefits to Poland, such as nearshoring, which is the shortening of supply chains to be closer to the consumer.
“We are probably the most attractive place in Europe for the placement of production being moved from Asia,” Bujak stated.
Moreover, Pekao Bank analysts point out that the investment projects announced last year have a total value of 4.1 percent of Polish GDP. This is the highest result in the EU and a massive step above other countries such as Hungary, Latvia and Ireland. The total value of forecasted investments in those countries has amounted to 2.5 percent of GDP each.