- Business Relationships
- Foreign direct investment
- FTAs and Treaties
- Development Cooperation
- Prospective fields of study (MOP)
Trade relations with the EU
According to data from the Polish Statistical Office for January to December 2021, economically developed countries (as defined by the IMF) are the main target of Polish exports with a share of 86.3%. If we count only EU countries, 74.8% of Polish exports go to them. On the import side, the situation is similar, where imports from economically developed countries make up 62.5% of total imports. Imports from EU countries account for 53.8% of total imports. According to Eurostat data, the nominal value of Polish exports to EU countries reached EUR 21billion, while the value of imports from EU countries reached EUR 188.8 billion.
|Exports from the EU (million EUR)||152,523.1||165,993.9||176 149.1||177,077.0||213,661.1|
|Imports into the EU (million EUR)||142,639.90||153,536.40||157,558.60||154,883.40||188,819.0|
|Balance (million EUR)||9,883.2||12,397.5||18,590.5||22,193.5||24,842.1|
Trade relations with the Czech Republic
Poland is one of the most important trading partners of the Czech Republic. On the export side, it is third after Germany and Slovakia, on the import side, and in terms of the total volume of trade, it is also third, in both cases after Germany and China. Trade exchange with Poland is growing in percentage faster than the total trade exchange of the Czech Republic. The importance of Poland for Czech exporters is thus gradually increasing.
Analogously, it also strengthens the position of the Czech Republic among Polish exporters as an importer of their goods and services. In 2021, imports from Poland to the Czech Republic reached a value of CZK 375.270 billion. Exports from the Czech Republic to Poland were worth EUR 331.678 billion. Nevertheless, Poland has maintained a positive trade balance in relation to the Czech Republic for the past few years, making it the only EU country, apart from Malta, with which the Czech Republic has a negative balance. In the year, the balance of the Czech Republic reached the value of CZK 4billion.
|Exports from the Czech Republic (billion CZK)||254.0||266.5||277.1||277.0||331.7|
|Imports to the Czech Republic (billion CZK)||293.7||308.4||314.7||312.0||375.3|
|Balance (billion CZK)||-39.7||-41.9||-37.6||-35.0||-43.6|
Trade relations with countries outside the EU
Among non-EU countries, Poland’s main trading partners in 2021 were China (2nd, EUR 4billion), Russia (3rd, EUR 17.0 billion), the USA (8th, EUR 8.8 billion ) and South Korea (10th, EUR billion) on the import side and Great Britain (4th, EUR 1billion), Russia (7th, EUR 8.0 billion) and the USA (9th, EUR 7.6 billion) on the export side.
|Exports from countries outside the EU (million EUR)||44,329.5||57,279.20||62,029.30||62,136.80||72 170.40|
|Imports to countries outside the EU (million EUR)||53,739.8||76,097.6||68,336.3||66,635.5||ON|
|Balance with non-EU countries (million EUR)||-9,410.3||-17,023.4||-17,481.9||-11,955.6||ON|
Source: EIU, Eurostat
Foreign direct investment
According to data from the Polish Economic Institute (PEI), the value of foreign direct investments directed to the Polish economy in 2021 reached USD 2billion. In a global comparison, Poland thus ranked 14th among FDI destinations. Compared to EU countries, it was third after Germany and Sweden. This is also the highest value in history, surpassing the results of 2019 and 2020 by more than 80%. The previous record year was 2007, when the value of FDI reached USD 19.9 billion.
According to PEI analysts, the above results confirm that Poland is benefiting from the global trend of shortening supply chains, which started with the trade war between the US and China and further accelerated due to the global impact of the coronavirus pandemic. FDI also has a positive effect on the labor market. According to the current calculation, foreign investors created a total of 339,000 jobs in the Polish economy in 2019-2021, which is the most in Europe.
Poland also offers a wide range of investment incentives. Investors can take advantage of government subsidies financed under the “Program for the Support of Investments of Significant Importance for the Polish Economy 2011-2030” (employment grant and investment grant). They also have the option of tax exemption (income tax, real estate tax) or the use of instruments co-financed from European funds. All support instruments are available equally and according to the same rules for foreign and Polish investors.
Attracting foreign investors is in charge of the Polish Investment and Trade Agency (Polska Agencja Inwestycji i Handlu, PAIH). 2021 was also a record year from her point of view – a total of 96 FDIs in which she was directly involved reached a value of USD billion and will create about 18,000 jobs. South Korea accounts for the largest share of these FDIs, followed by the USA and Germany.
FTAs and treaties
The basic contractual framework of relations between the Czech Republic and Poland is membership in the EU. In addition, we have a large number (almost 100) of bilateral agreements. Among the most important are:
- Agreement between the government of the Czechoslovak Republic and the government of Poland on good neighborliness, solidarity and friendly cooperation (1991);
- Agreement between the government of the Czech Republic and the government of Poland on cross-border cooperation (1994);
- Agreement between the Czech Republic and Poland on cooperation and mutual assistance in the event of disasters, natural disasters and other extraordinary events (2000);
- Treaty for the Avoidance of Double Taxation, signed in Warsaw on June 24, 1993 with effect from January 1, 1994 (amended on September 13, 2011 with effect from January 1, 2013).
The main legislative framework for development assistance is the Ustawa o szołobrzej rożowzejnej, which entered into force on 1 January 2012. In accordance with this law, development cooperation is provided on the basis of a multi-year program adopted by the government. The program sets priorities for development cooperation in geographical and thematic areas.
On January 1, 2021, Poland approved the multi-year development cooperation program for the years 2021-2030 “Solidarity for Development “. Based on it, in the years 2021-2030 Polish development cooperation will focus on 10 priority countries: 4 Eastern Partnership countries (Belarus, Georgia, Moldova, Ukraine) and 6 countries in Africa and the Middle East (Ethiopia, Kenya, Senegal, Tanzania, Lebanon and Palestine). Thematic priorities are then determined on the basis of the UN Sustainable Development Goals. Of the 17 goals, Poland has prioritized 8, with the greatest attention being paid to goal 13 “Climate measures” and 16 “Peace, justice and strong institutions”.
In 2020, Poland provided foreign development aid in the total amount of PLN 3.23 billion (CZK 7.2 billion), which corresponds to 0.14% of GNI. The majority of these funds, a total of 73% in 2020, were nevertheless earmarked for multilateral development aid. The largest part of the funds was sent to the European Development Fund. Poland’s bilateral development cooperation is dominated by study scholarships and education funding, the share of these items in the bilateral aid budget reached 56% in 2020. The largest part of this aid was provided to Ukraine and Belarus. Data for 2021, which was the first year of the new multiannual programme, is not available.
Prospective fields of study (MOP)
Poland does not hide its ambition to become a key infrastructural and logistics hub of the Central and Eastern European region. This ambition is supported by specific investments. It is also becoming a regional center in terms of digital infrastructure, with cloud services at the forefront. The result is a dynamic environment with many opportunities for Czech companies.
Transport industry and infrastructure – the construction of transport infrastructure is governed by the National Road Construction Programme. In its current version, it expects to build approximately 3,600 km of new highways and expressways. Half of this length is already built or in the process of being built. The construction of other sections will be started in the following years. From the point of view of Czech companies, contracts for smaller constructions, which are tendered according to separate investment plans, could be particularly interesting. Among them is the program to build 100 urban bypasses in the territory of Poland in the period 2020-2030. The cost of implementing the program was estimated at nearly PLN 28 billion. Another important investment program of the Polish government is called Bridges for Regions.
This program envisages the construction of 21 new bridges over the largest Polish rivers. PLN billion was allocated from the state budget to fulfill the program’s tasks. The Program for strengthening the national road network until 2030 is also aimed at improving the quality of road transport. In addition to road maintenance, the projects will also focus on intersections and road security for other road users. A total of PLN 64 billion will be allocated in its time horizon. Last but not least, the Safe Road Infrastructure 2021-2024 program is also worth mentioning. A total of PLN billion is intended for smaller traffic constructions aimed at increasing traffic safety, including signage, lighting, cycle paths, sidewalks, overpasses and other elements aimed at cyclists and pedestrians.
Energetics – the basis of the energy mix in Poland is still the production of thermal power plants on black and brown coal, which make up approximately two thirds of the total installed capacity of the Polish energy industry. The dominance of coal in the Polish energy mix will continue for many years, the need to modernize Polish thermal power plants, half of which are older than 50 years, will then offer many opportunities for Czech companies. Poland will be forced to decommission outdated technologies and replace them with more modern technologies by 2030 at the latest due to stricter environmental protection rules adopted at the EU level. In the field of renewable resources, the Polish government’s priorities are the development of photovoltaics and, above all, wind power plants. A special law to support offshore wind farms was approved in 2021 (the so-called offshore law).
More and more projects are also focusing on the development of photovoltaics, which will generate strong demand in the coming years. Poland has high hopes for the use of hydrogen. It is currently the third largest producer of hydrogen in Europe and the fifth in the world. Annual production is approximately 1 million tons, which is 10-15% of European production. However, hydrogen in Poland is mainly produced by refineries and chemical plants, all hydrogen production is made from fossil fuels. However, this should change in the future. In addition to energy production itself, the transmission and distribution network will also require investment. By 2030, the Polish government plans to allocate a total of over PLN 14 billion (CZK 84 billion) to investments in the transmission and distribution network.
ICT and services – Poland has been experiencing strong e-commerce development for a long time. The total value of the e-commerce market reached EUR 2billion in 2021. For comparison, in 2019 it was approximately EUR 1billion, and in 2020 it was EUR 1 billion. According to revised estimates, Polish e-commerce has an average annual growth of 12% until 2026, when it will reach the level of EUR 35 billion. A related trend is also the growth in the number of Internet users who shop online. Currently, it is approximately 80% of them. More than 80% of shoppers also declare their intention to maintain or even increase the share of online purchases in the future. This developed e-commerce sector with dynamic growth creates ideal conditions for foreign (and therefore also Czech) companies that are interested in offering their product directly on the Polish retail market.
Poland is also very successfully connecting to the European and global digital infrastructure and is gradually becoming the center of cloud services for the entire region of Central and Eastern Europe. Google launched a new regional Google Cloud in April 2021. Microsoft is also making a similar investment in Poland, which has launched its own cloud, which is part of the global Microsoft Azure platform. This environment creates the conditions for the digital transformation of companies throughout the region and creates many opportunities for technology and IT companies. The development and production of computer games also has a very strong position in Poland.
Construction industry – the Polish construction industry has shown stable growth in the number and value of new orders in recent years. Large government programs in the field of line constructions set long-term financial and project frameworks supplemented by funds from European Union funds, thereby further stabilizing the entire sector. Residential and commercial construction is also a significant opportunity for Czech companies, where increased activity by developers and investors can be observed. In 2021, the construction of a record number of 277,425 apartments and family houses was started, and there was also a record 234,718 completed apartments and houses. One of the factors behind this boom is the legislative setting of permitting processes that are fast and predictable. Compared to the Czech Republic, we can see the results, for example, in the form of the number of apartments per thousand inhabitants, for which building permits are issued annually.
Healthcare – the long-term problems of the Polish healthcare system are mainly related to its underfunding and low level of investment. In order to improve the level of the sector, the Polish government has updated its medium-term plans and set the goal of achieving an average expenditure on public healthcare of 7% of GDP within 6 years. The value of the private healthcare market is also constantly growing, according to the current forecast, it should grow at an average rate of 7% per year in the years 2021-2026. Opportunities for Czech companies will be mainly in the planned modernization of Polish hospitals and their equipment, including beds for standard and intensive hospital care. The Ministry of Health also perceives the need to improve care for the elderly through the development of day care homes, facilities for care and treatment, and centers for people over 75 years of age. In the coming years, special attention will also be paid to the care of oncology patients. The Ministry of Health has therefore allocated a total of PLN 900 million (approximately CZK billion) for the revitalization of the National Oncology Institute.
Rail and rail transport – considering the size of Poland, the density of its rail network is still below the European average. The development of this infrastructure thus belongs to the government’s priorities. The National Railway Program establishes a total of 230 projects, which are to ensure the modernization or completion of basic lines included in the TEN-T network by 2023; in addition, the Kolej+ program is valid until 2028, which is supposed to ensure the construction of completely new lines for regional transport. The national train carrier PKP Intercity is then investing tens of billions of CZK in the modernization of the rolling stock. Here, Czech companies can apply for contracts directly or as subcontractors of other manufacturers of rolling stock operating in Poland.