Page 12 - bne IntelliNews Poland Outlook 2025

3.0 External Environment
Polish exports are facing a downturn, with recent data suggesting the situation is worsening. The year 2025 is expected to bring significant challenges to global trade, exacerbated by the looming threat of a tariff war as former US President Donald Trump signals protectionist measures. Export growth may prove challenging under these conditions, while an anticipated recovery in domestic demand is likely to boost imports. Consequently Poland’s external balance is projected to weaken.
Beyond the US, Polish exports are struggling due to prolonged economic difficulties in Germany, the country’s largest export market, which has been in recession for two years. Certain Polish export-oriented sectors, particularly those linked to consumer goods production, have managed to weather the downturn by diversifying beyond the EU, including increased exports to markets such as the US and UK.
Polish exporters are known for their flexibility, and improving forecasts for some key markets provide a degree of cautious optimism. An expected interest rate cut by the European Central Bank (ECB) could stimulate consumer demand in the Eurozone, which would be a welcome development for Polish exporters, as Eurozone countries account for approximately 60% of Poland’s foreign sales. Additionally, a potential recovery in the European real estate market, if realised, could further enhance export prospects in 2025.
However, one factor limiting export potential is the recent decline in foreign direct investment (FDI) inflows. Analysts suggest this is likely a temporary trend, given the continued competitiveness of Poland’s economy. Despite substantial wage increases in recent years, Polish salaries remain among the lowest in the EU. A deceleration in wage growth, coupled with rising productivity and demand, is expected to significantly slow the growth of unit labour costs, strengthening Poland's competitive position, particularly within Europe.
In terms of exposure to potential US tariffs, Poland is relatively insulated. The United States ranks as the eighth-largest destination for Polish exports, accounting for roughly 3% of total foreign sales and representing about 1.5% of Poland’s GDP.
However, the impact varies across industries. For instance, manufacturers of other transport equipment rely on the US for 17% of their export revenues, with exports generating over 60% of the sector’s
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