Poland as an Emerging Superpower of Europe

Under Tusk’s administration, Poland aims to match and overtake neighbouring Western European countries. Its robust economy, driven by recent strategic investments and focus on its entrepreneurial spirit, has given it a pivotal role in European markets. Unlike the rest of the European countries, like Germany, which has seen lackluster growth in recent years due to overseas competition with China, Poland has been steadfast in maintaining significant growth rates. It is expected to exceed 4% GDP growth in 2025. Poland has achieved this through much needed injections into the economy and strategic foreign investments into emerging markets.

Poland aims to inject 650 billion zlotys (€155b) into the economy through defence, green energy, and transport infrastructure. Poland aims to set aside approximately 180 billion zlotys to domestic transport infrastructure like improved railway networks and deep-water ports in their Baltic sea border, located in the city of Świnoujście. These efforts aim to connect Poland’s manufacturing sectors to international logistic links to reduce costs and make its exports more competitive in the European market. 

Defence expenditure has also been a strategic sector that Poland wishes to expand. The looming security threat posed by Russian activity has concerned Polish officials and has prompted them to invest heavily in domestic defence capabilities. The government has already used funds freed by the EU’s recovery facility- amounting to €60bn in grants and cheap loans - and pledged to use 25% of it on the military.These investments have been key topics that Poland addressed after receiving much needed funds.

Recent foreign direct investment into the country has targeted areas of potential expansion like the chip manufacturing industry. Intel announced a $4.6 billion investment into a production plant near Wrocław, one of Poland’s largest FDI projects in decades. An additional $1.9 billion was secured from the EU to expand Europe’s chip manufacturing capabilities and to meet its target of controlling 20% of the chip industry by 2030.

Flexible workforce

Polish workers are highly skilled in manufacturing, engineering and technology, making it a hotspot for foreign direct investment. It has a relatively high employment rate in the ages of 20-64 at 75% and unemployment at 5%, illustrating Poland’s labour market as a resilient force in Europe.

However, there have been issues with the demographic structure of Poland, mainly due to its aging population. An aging population in Poland will reduce the economically active population in the coming years and take a heavy toll on its current economy track record, as fewer people can work and a growing number of them will need more benefit spending in pensions and healthcare. This has been offset by the influx of migrant workers from neighbouring Ukraine.

During the onset of the Russo-Ukrainian war, approximately 1.5 million Ukrainians sought refuge in Poland. Since then, they’ve contributed significantly to the economy, providing human capital to fill much-needed jobs in under-serviced sectors and increasing consumption in Poland as workers spend their wages on necessities. Ukrainians accounted for 5% of the total workforce in Poland, contributing 0.5-2.4% to the country’s annual GDP growth. In addition to this, Ukrainians have also created local businesses, accounting for 12% of newly registered businesses in 2024. 

Poland’s labour market has also promoted economic growth by increasing its minimum wage to 4,666 zlotys, expanding domestic consumption and boosting aggregate demand, which has contributed to Poland’s economic growth tremendously over the past few quarters.

Challenges

Although Poland’s economy has grown dramatically since the pandemic, it still faces challenges, especially concerning its export partners. Germany is its largest recipient of exports, accounting for nearly €100 billion in the value of goods and services to the Polish economy. Germany specialises in manufacturing traditional petrol cars - companies like Volkswagen, BMW, and Porsche have seen massive hits to their profit margins, which were attributed to the growing competition from Chinese automobile manufacturers who have since adopted cheaper and technologically better electric cars. If Germany gets a cold, so does Poland. There is also a skill gap that hasn’t been properly addressed in the tech and AI industries in Poland, which will soon be in high demand as economies phase in new AI technologies.

At its current state, if Poland is able to close the gap in current issues like the technology sector, it may very well secure its spot as an economic powerhouse in Europe.

Article written by Rafi Wijayanto | Proofread by Zhangir Zhangaskin