Foreign investments in Poland are at a six-year low due to global recession, lower profits, and rising local costs.
Foreign investments in Poland have significantly declined, reaching just €4.2 billion in the first half of 2023. This marks the lowest level since October 2017. The decline reflects a combination of global economic recession, reduced corporate profits, and rising costs within Poland.
Changing Economic Factors
This downturn indicates a shift in the economic factors that once attracted foreign investors to Poland. Between 2020 and 2022, Poland benefitted from a robust industrial sector, supply chain reorganization, and competitive labor costs. However, these advantages have waned as industrial profits decrease and labor costs rise.
A Challenging Cycle for Investments
Currently, the economic cycle is unfavorable for foreign direct investments, contrasting with the relatively stable portfolio investments. This trend suggests a broader hesitance among companies to invest in the current economic climate, impacting Poland’s investment landscape.