The current model of economic growth, based on low labor costs and export orientation, is exhausted; Poland needs a strategy – indicate ING BŚ economists in a report prepared in cooperation with the European Economic Congress (EEC).
“Poland is a country of economic miracle, but the current, successful model of Polish economic growth, based on low labor costs and export orientation, is exhausted. The European Union (and Poland) is currently subject to much stronger competitive pressure than in previous decades, which is well illustrated by Draghi's report. This is mainly due to the expansion of China, US protectionism and increased geolytic uncertainty, at a still ongoing Russian war in Ukraine ” – the motor height of the Polish economic growth was written in the report.
“After more than 20 years of membership, Polish companies have learned to navigate well on the Union EU market, but a big challenge is stagnation in Germany, the greatest trading partner of Poland. High hopes are associated with the change of government after the February elections to the Bundestag and changes in the constitution, breaking with excessive fiscal conservatism” – added.
The main economist of ING BŚ Rafał Benecki pointed out during the presentation of the report at the European Economic Congress in Katowice that the stagnation of industrial production in Poland and Central Europe is not just a reflection of a similar tendency in the German industry, but a more serious problem.
“We assumed that the reason for stagnation is the situation in Germany, it is the main export market. The comments we have obtained (when creating a report – PAP) show that the problem is deeper, also on the Polish side. We are dealing with a jumping deterioration in the competitiveness of Polish companies. The minimum salary has doubled in recent years, companies indicate that they are not able to compensate for this in a short time, even the greatest ones The winners of the last 30 years are unable to do this, “said Benecki.
“Secondly – the energy is more expensive. And thirdly – China is very competitive, take over shares in global trade and aggressively enter the Polish market. Some say, very euphemistically, that from the point of view of cost savings – we have lost attractiveness for Romania, Serbia, Turkey and Egypt. Economist.
As indicated in the report, this translates into a decrease in profitability, partly resulting from domestic policies (ankle increase in the minimum wage), law and tax instability, but also regulation in Europe and the ambitious EU climate policy.
“The factor inhibiting export sales is the zloty strengthening, which, however, may be temporary” – it was written in the publication.
The authors of the report indicate that the structural weaknesses of the Polish economy, such as aging of society, lack of comprehensive migration policy, education mismatched to the needs of the labor market, unsatisfactory quality of public administration, low expenses on R+R or the advantage of smaller companies are becoming more and more revealed.
The chief economist of ING BŚ indicated that although Polish industry is in stagnation, economic growth drives the service sector.
“The Polish economy is growing the fastest in the EU all the time, this was the case in 2024. The industry underwent stagnations, but the driving force of growth is services. This is also natural at this stage of economic development – the burden of growth transfers from industry to services, it is an optimistic element of our report” – said Benecki.
“Poland has a lot of advantages that the service sector can use. We have a lot of educated people, engineers, programmers – the report shows that the availability of educated labor is high, but we have a shortage of manual workers, craftsmen, and qualified employees” – he added.
Benecki pointed out that Poland needs business scaling – there are a lot of small companies on the market, but not much large.
“The Polish economy is characterized by overrepresentation of small and medium -sized companies that have less investment capabilities, less often decide on foreign expansion and are more skeptical in the face of digitization, robotization or implementation of AI solutions than large companies. With such a structure of the economy, the process of catching up richer countries will be difficult. Meanwhile, politicians still want to direct a lot of help to the sector of small and medium -sized enterprises,” report.
“It is needed to change the proportion and greater support for business scaling. Our interlocutors also see such a need. Business leaders with whom we talked are demanding that Poland's development strategy arise. Analysis of comparative predominance, determining economic priorities and strategic sectors that could become locomotives of growth” – added.
The report shows that Polish companies see the need to change the new growth model based on sectors with a higher added value and innovation.
“This will require response to demographic challenges, work for the deregulation of the economy (horizontally and at the industry level) and accelerating investments in energy transformation, in order to reduce market energy prices in the long run. Possible relief and transitional periods in the implementation of EU climate policies and ESG regulations should be support” – wrote.
“Poland must benefit from waking up Europe in the face of the growing isolationism and unpredictability of the US in the times of Donald Trump, on increasing defense expenditure and promotion of strategic autonomy in the EU industry” – added.
The main economist of ING BŚ noted during the presentation of the report that Poland needs an economic strategy to continue to grow.
“We see it, economists, but companies that expect clearly defined economic priorities, analyzes of comparative advantages, determining perspective sectors. The strategy should be systemic, include, among others, adapting education to the needs of business, the labor market – the thoughtful migration strategy is changed,” said Benecki.
“In the past, Poland took care of the acquisition of know -how and technologies from foreign companies, we should order it better, e.g. in the case of a new wave of investment. We can see that recently a lot of service investments are coming to Poland, and this element can be the driving force of growth in the coming years. Therefore, it is worth creating conditions to make the penetration of knowledge to Polish companies better” – he added. (PAP Biznes)
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