“BERLIN. There was great enthusiasm in Poland at finally joining the ranks of the world’s 20 largest economies—though, as it turned out, that excitement was premature. The International Monetary Fund (IMF) had to revise its autumn forecast this spring; Poland—with a population of 36 million—fell eight billion dollars short of matching the gross domestic product (GDP) of Switzerland, a nation of nine million people, which stands at 1.044 trillion dollars. Yet this has not dampened the spirits of companies operating in Poland.
Just recently, companies surveyed by the fourteen German Chambers of Commerce Abroad in Eastern Europe named Poland the region's second-best investment location, ranking behind only Lithuania. Trade between Germany and Poland rose by a remarkable 5.7 percent last year, reaching 180 billion euros. Poland is now poised to overtake France—currently Germany’s fourth-largest trading partner at 186 billion euros. The gap to the EU average is narrowing; according to the European Commission, Poland’s GDP per capita, adjusted for purchasing power parity, has reached 81 percent of the EU level.
Poland’s economy grew by 3.6 percent last year—a growth rate unmatched by any other major EU country. Economists such as Michal Mozdzen of the University of Krakow believe the country is capable of repeating this performance in the current year, while the IMF projects a still-robust 3.3 percent.
The French credit insurer Coface even predicts growth of 3.8 percent for an economy that has started the new year with strong momentum. However, that forecast predates the war in Iran and its consequences—namely rising inflation and a monetary policy that dampens both consumer spending and lending.
None of this has dampened the enthusiasm of Lars Gutheil, Managing Director of the German Chamber of Commerce Abroad in Warsaw: "At a time when companies must focus on cost-cutting, our neighbor scores points thanks to its size and modern infrastructure," he says. Poland is at the heart of shortened supply chains geared toward European production. In times of geopolitical uncertainty, German SMEs are looking for a "safe haven"—and finding it in Poland. More than a third of the companies surveyed stated that they intend to expand their investments in Poland due to geopolitical tensions.
With its strong domestic market and highly skilled workforce, Poland is viewed as an attractive location for foreign direct investment (FDI) not only by German entrepreneurs. Austria’s leading bank, Erste Group—which recently entered the market by acquiring a 49 percent stake in Santander Bank Polska for seven billion euros—also reports "solid FDI inflows." However, the significant reluctance of local investors remains a problem.
Nowhere else in Central and Eastern Europe do local businesses and households invest as little in their own country as they do in Poland (based on 2024 Eurostat data), according to Erste Group. Polish companies invested only nine percent of GDP—a figure described as "well below average." By comparison, the share was 16 percent in the Czech Republic and 15 percent in Hungary. This gives Poland the lowest rate in the region and the fourth-lowest in the EU.
The consequence: "Consequently, Poland's investment landscape currently relies on public contracts rather than broad-based capital formation in the private sector," states Erste Group. Last year's budget deficit of 7.3 percent—accompanied by mounting warnings from financial markets—is a result of this; it is the second-highest deficit in the EU, trailing only Romania.
A large portion of the funding comes from the EU's post-pandemic recovery fund. However, this fund is set to expire this year. Analysts at ING Bank have also expressed concern that the slow release of funds from the "Recovery and Resilience Facility" (RRF) and the sluggish pace of spending could impact growth, which could dampen investment this year. According to official data, only 40 percent of the RRF grants allocated to Poland had been paid out to beneficiaries by February, while approximately 60 percent remained outstanding.
Sluggish investment momentum is not the only gloomy aspect of Poland’s economic picture. Credit specialists at Coface point to intensifying competition, which is driving up labor costs, squeezing margins, and causing payment discipline to deteriorate. It takes an average of 53 days for an invoice to be settled—a level not seen since 2021. Furthermore, the number of insolvencies has reached a record high of 6,566.
The political climate is also causing headaches for investors. The ongoing dispute between the president—who is aligned with the opposition PiS party—and the center-left government led by Prime Minister Donald Tusk is stalling many legislative initiatives, ranging all the way to the appointment of judges. Most recently, the issue at hand was whether the country could accept subsidized EU loans totaling nearly 44 billion euros for military modernization.
The data appendix to the AHK survey notes that "the country's political stability is currently the biggest investment hurdle for companies." 64.1 percent of respondents cited this factor, whereas the perennial complaints of "excessive bureaucracy" and "excessively high taxes" registered lower figures. The fact that half of the respondents would swap the zloty for the euro reflects the sentiment of the business elite rather than that of the general population.
Political instability—like the lax fiscal policy—is likely to persist at least until next year's parliamentary elections. By then, according to the International Monetary Fund, Poland could catch up with and overtake Switzerland to claim the number 20 spot among the world's largest economies. In any case, Warsaw has already received an invitation to the G20 meeting in Miami this December. However, Donald Trump has invited Switzerland as well.” [1]
Poland is flooded with war propaganda, that nuclear winter is around the corner. Polish, who believe this propaganda, avoid investing their money in future radioactive places of nuclear winter. Germans, ruined by high energy prices from sanctions on Russia, are eager to extend the life of their companies by moving them into Poland as a place with cheaper labor. Main opposition party AfD, friendly to Russia, makes Germans less willing to accept war propaganda.
Surveys by the German Chamber of Commerce and Industry indicate that high electricity and heating costs are burdening German firms, with roughly 20% of industrial companies relocating capacity abroad or considering it. Major manufacturers like Miele have shifted appliance assembly lines to locations like Poland to optimize operational costs and benefit from efficient administration.
1. Warum deutsche Investoren Polen lieben: In Polen läuft die Wirtschaft wie geschmiert. Doch bei näherem Hinsehen zeigen sich Unwuchten und Fehlanreize. Frankfurter Allgemeine Zeitung; Frankfurt. 04 May 2026: 17. ANDREAS MIHM
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