Despite the pandemic and the war in Ukraine, Poland has not experienced a significant outflow of foreign investors. However, an end to the conflict across the eastern border would help attract new investments, says Professor Eliza Przeździecka from the Warsaw School of Economics (SGH). Data from 2023 and early results for 2024 indicate a halt in the upward trend of previous years, influenced in part by the overall global economic climate.
“The main barriers for foreign investors expanding into the Polish market are rising energy costs and increasing labor costs,”
says Dr. hab. Eliza Przeździecka, SGH professor and director of the Institute of International Economics at SGH, in an interview with Newseria.
“Industries that require high energy input – the so-called energy-intensive sectors – or large labor forces may see Poland as less attractive. However, those looking for a highly skilled workforce will find such resources here. I believe this is currently one of the key factors drawing foreign investors to Poland.”
According to a National Bank of Poland (NBP) report, 2023 saw a reversal of the previously observed upward trend in foreign direct investment (FDI) inflows. At the end of 2023, the total value of direct investments in Poland amounted to PLN 1.36 trillion. The value of new FDI transactions dropped by PLN 38.4 billion, from PLN 158.3 billion in 2022 to PLN 119.9 billion in 2023. The decline was mainly due to lower reinvested earnings and a negative balance of debt instruments – a situation likely linked to the economic slowdown in 2023.
In the October 2024 report “Foreign Direct Investment in Poland”, co-authored by Professor Przeździecka, the authors highlight that the nearly 9% drop in investment is the first decline after three consecutive years of growth. They also note that 2023 was the second year in a row of global declines in FDI. Global investments amounted to $1.332 trillion in 2023, down from $1.356 trillion in 2022 and $1.622 trillion in 2021. Two-thirds of OECD countries and more than half of the 20 largest host economies for foreign firms—including Poland—reported FDI declines in 2023.
While full-year data for 2024 is not yet available, the Polish Investment and Trade Agency (PAIH) reported that it supported 53 investment projects this year, with a declared total value of about €2.4 billion. In comparison, 74 projects worth €3.2 billion were supported in 2023 (excluding the canceled Intel investment). This suggests another potential decline in 2024.
Outlook for 2025 Depends on the War
The prospects for 2025 will largely depend on the outcome of the war in Ukraine. Since the start of the year, financial investors have been betting on a scenario of conflict resolution, with capital flowing into European stock markets at the expense of Wall Street. However, this capital can be easily redirected elsewhere—unlike long-term investments, which are more difficult to relocate.
“The past three years have shown us that despite geopolitical tensions and our proximity to the conflict, this situation does not necessarily deter investment. Many companies see opportunity here—a chance to establish a presence and be ready to participate in Ukraine’s post-war reconstruction, as suppliers or service providers,”
says Professor Przeździecka.
“However, ending the war would positively influence the overall investment climate and perceptions of regional stability. Security is incredibly important to all of us. We don’t yet know how future relations between the U.S. and Russia, Europe and Russia, or the U.S. and Europe will evolve. But Poland is at the center of these geopolitical developments, and that gives us a significant role.”
Who Invests in Poland?
In 2023, the largest FDI inflows into Poland came from:
- The Netherlands – PLN 34.2 billion
- The United Kingdom – PLN 24.8 billion
- Ireland – PLN 13.3 billion
- Germany – PLN 9.9 billion
These four countries accounted for over two-thirds of all foreign investment in Poland that year.
While German companies hold the highest total value of equity investments in Poland, financial statements show that France’s Orange is the largest individual investor. In second place is ArcelorMittal, registered in Luxembourg and operating in Poland through ArcelorMittal Poland SA based in Dąbrowa Górnicza. The third-largest foreign investor is a group of companies owned by the Porsche–Piëch family from Germany, including Volkswagen, Scania, and MAN.
Sectoral Changes in Investment
Compared to the pre-pandemic and pre-war periods, there have been noticeable changes in the industry structure of foreign investors in Poland.
- Real estate services remain in the top spot, but asset value in this sector declined from $49.8 billion in 2018 to $43.7 billion in 2022. Despite this, the sector had experienced 10% annual growth from 2010 to 2018.
- Corporate and holding company activities moved up to second place with assets worth $21.8 billion, a much higher position than in previous years.
- Construction services for building projects held steady with assets around $19 billion, making it the third-largest sector.
Meanwhile, automotive manufacturing is no longer among the leading sectors for foreign direct investment in Poland.
