Polish -British economic relationsPublished: 13.06.2014
Economic relations between Poland and the UK experienced a boom after Polish accession to the European Union. Poland benefitted greatly as markets opened and the borders opened: In 2013 Poland exported almost EUR 9.9 bln in goods to the UK and imported goods worth EUR 4 bln, rendering a very positive balance of trade with the British Isles.
Currently, the UK is second amongst Polish export markets, ninth on the list of import suppliers. Seen from the British side of the equation, Poland was the 22nd largest foreign buyer of British products in 2013 (vs 16th in 2011) at GBP 3.9 bln and the 12th supplier of British imports in 2013 (vs 18th in 2011) at GBP 7.9 bln, according to data from HM Revenue & Customs.
Poland can brag of high added value exports to Britain. According to the Polish Embassy in London, “the structure of Polish exports to the UK is usually dominated by highly processed goods.” Leading Polish exports include: mechanical devices, including telecommunications, recording and reproduction of sound, vehicles, office and automatic data processing equipment, electrical machinery and other equipment, furniture and furniture components. In the case of goods exported from the UK to Poland, highly processed goods also dominate, including: medical and pharmaceutical products, vehicles, machinery for specific industries, oil, petroleum derivatives and related materials, the Embassy states.
Source: GUS, prepared by PAP
Growth in trade has been strong over the years, albeit declining of late as bilateral trade has matured. Polish export growth to the United Kingdom, expressed in euro, slowed from 20% in 2010 to 16.5% in 2011, 8.5% in 2012 and 2.3% in 2013. UK exports to Poland followed that pattern: 15.5% in 2010, 9.2% in 2011, minus 8.1% in 2012 (a decrease due to lower domestic demand in Poland that year) and 7.1% in 2013.
British FDI in Poland - an opportunity for further development of economic cooperation
Other areas of Polish-British economic relations leave room for development, including FDI. Polish central bank data showed that after a strong 2011, in which Great Britain ranked second on the list of the largest investors in Poland (EUR 4.2 bln), 2012 brought about a much weaker performance of FDI in Poland at the level of EUR 843 mln. Data for FY2013 are not yet available.
Many British brands are already present in Poland. Poland is the largest market in Central Europe for supermarket giant Tesco, with over 400 stores and turnover of PLN 2 bln. Imperial Tobacco Plc , GlaxoSmithKline, British Oxygen Corporation , Aviva Plc , Bates Ltd (company transport and storage), Cadbury Schweppes and Shell 's Overseas Holdings Ltd. Are also present.
Some 1315 companies with British capital were in Poland at end-2012, data from Poland’s Central Statistical Office (GUS) show. British direct investments in Poland accounted for 2.96% of total FDI to Poland, quite low compared to Germany at 16.93% or France at 17.63%. The majority of British companies operating in Poland are small businesses employing up to 9 people (904).
The increasing presence of mid-sized companies in FDI is considered a key current direction in British-Polish relations.
"We have observed an increased interest of British investors in the Polish market, particularly among medium-sized companies,” a statement from the Polish Embassy in London notes. Firms frequently seek EU funds when placing a company in Poland.
“A real chance for further development seems to be found in moving the supporting departments of large companies (accounting, human resource management, research and development, etc.) to other countries (the so-called Business Process Offshoring),” the Embassy says. Poland is an “attractive place to locate this type of investment,” given geographical and cultural proximity, the Embassy adds.
Source - Polish Press Agency, Economic Service