Opportunities in Polish market

With the enlargement of the European Union on May 1, 2004, Poland became the sixth biggest E.U. market in terms of population, which numbers 38,1 million. Such factors as E.U. integration, domestic market size, and availability of a young and highly-trained labor force, have transformed Poland into one of the preferred destinations of international investors. The most recent FDI Confidence Index published in 2005 by the prestigious U.S. consulting company A.T. Kearney, named Poland the fifth most attractive destination for international investors and third among emerging countries (after China and India). In 2006, FDI into Poland exceeded 10 billion dollars.

Polish GDP growth of 6,5% for all of 2007 was among the highest in the E.U., while inflation rate remains at historically low levels.

GDP growth is being fueled to a significant extent by the growth of Polish private corporates, particularly those listed on Warsaw Stock Exchange (“WSE”). The development of the stock market has been a major success of Polish reforms since the beginning of the 1990’s. In the first 11 months of 2007, over 70 IPO’s took place on WSE, ranking it second among European markets in terms of IPO’s. The number of listed companies exceeded 340 at the end of November 2007, while the capitalization of the stock market reached 215 billion Euro (70% of 2006 GDP). The WSE is expected to be privatized in 2009.

A growing contribution to GDP growth is being also made by the E.U. structural funds, of which Poland is the biggest beneficiary among all E.U. member states.

Some sectors which offer promising growth opportunities are the following:

  • Gas distribution
  • Environmental sector
  • Utilities
  • Financial services
  • Food
  • Hotels and tourism
  • Ceramics
  • Media
  • Infrastructure construction
  • Private healthcare
  • Specialty retailing

The parliamentary elections in October 2007 marked an important turn towards more liberal economic policies. The new government is committed to the following objectives:

  • Acceleration of macroeconomic growth
  • Tax reduction for households (corporates enjoy already a flat tax of 19%)
  • Reduction of public sector deficit
  • Resumption of privatizations
  • Healthcare reform
  • Entry into EURO-zone as soon as possible

 

  
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