Economic relations between Poland and the United Kingdom
An exceptional and enduring partnership
Warsaw, September 2019
The centenary of renewed relations between Poland and the United Kingdom is an excellent moment to look back and review their current status, while reflecting on their prospects for the coming years and decades. Despite the changing international landscape, the relations between Poland and the United Kingdom can be described as an exceptional and enduring partnership.
The most compelling evidence that the bilateral economic relations are thriving is a strong rise in trade. Adjusted for inflation, trade by value increased over fivefold between 1995 and 20181. Exports of goods from Poland to the UK rose from USD 930m in 1995 to USD 16.6bn in 2018, making the latter Poland’s third largest export market (after Germany and the Czech Republic)2. Over the same period, imports from the UK went up from USD 1.5bn to USD 6.5bn3.
The most spectacular rises were seen in the food industry and machine building Poland’s imports from the UK include mainly chemical products and machinery. The United Kingdom ranks even higher (holding number two position) as Poland’s trading partner in services. Every tenth transaction between Poland and the world involving services is with the United Kingdom.
The exceptional quality of these relations is also evidenced by the fact that the actual volume of Poland’s trade with the United Kingdom is significantly above that estimated by an econometric model for 185 countries, taking into account the size of and the distance between their respective economies. The actual trade volume (over USD 20bn in exports and imports for 20184) exceeds the amount predicted by the model by more than 30% (just over USD 15bn). Exceptionally high trade volumes relative to the countries’ GDPs include their strong competitive advantages over European rivals as well as widespread migration of Poles to the British Isles.
Over the past century, and in particular in the years since Poland threw off communist rule, our mutual trade has blossomed and flourished, growing swiftly and supporting the development of both our countries. The best evidence of the development of bilateral economic cooperation is the dynamically growing trade exchange, the value of which in 1995-2018 increased more than five times.
- Jonathan Knott, British Ambassador to Poland
Companies from the UK have been the fifth largest group of foreign investors, their direct investment in Poland having reached PLN 48.1bn5. As a result, Polish GDP in 2017 is estimated to have been higher by as much as PLN 15bn compared with a scenario in which no such investment had been made. There are approximately 400 UK-based non-financial sector companies operating in Poland, employing over 110,000 people – mainly in manufacturing and retail. In addition, UK-based financial services companies present in Poland employ over 4,000 people, bringing the total to approximately 115,000.
British investors plan further development in Poland, so their impact on the economy and society will increase.A survey conducted among selected British firms operating in Poland has found that 63% of respondents want to increase headcounts over the next five years,
and 73% are set to raise investment spending.
We are pleased that Poland is well perceived by prospective investors on account of the size of its economy and its growing integration with the global economy and EU market, as well as the availability of local suppliers of goods and services. I am particularly happy with the fact that British companies have plans to further expand their footholds on the Polish market: statistically, three out of any four of them want to increase staffing and investment levels.
- Antoni F. Reczek, Chairman of the British-Polish Chamber of Commerce
Although the two countries are not neighbours, the level of their economic relations is much higher than what could be expected looking at the size of their respective economies or their geographical distance. The potential for developing cooperation is particularly high in relation to global challenges, such as climate change, pollution or excessive pressure on natural resources, water management, the circular economy or digitization of the public sector. These civilization challenges are also huge business opportunities that can further drive the cooperation.
British companies operating in Poland are actively committed to the Sustainable Development Goals, while the UK public administration is ready to share its knowledge and best practice in public policies. What renders this partnership exceptional are its well established foundations, translating into economic benefits, as well as a set of shared values, with sustainable development featuring prominently on the two countries’ agendas.
- Irena Pichola, Partner, Leader of the Team for Sustainable Development in Poland and Central Europe at Deloitte Poland
This report was prepared on the occasion of the 100th anniversary of the resumption of diplomatic relations between Poland and the United Kingdom.
It was produced as part of the Business is Great campaign.
Report partners:: Embassy of the United Kingdom of Great Britain and Northern Ireland in Warsaw, British-Polish Chamber of Commerce.
Entities responsible for providing part of the source data and information for the overview of best practices: Arriva, Grupa Aviva, BP, Diageo, GlaxoSmithKline, Grupa LUX MED, Provident, Sage, Fundacja Sue Ryder, Tesco.
1 Adjusted for inflation, i.e. at current prices
2 GUS 2019, at current prices
3 GUS 2019, at current prices
4 This actual imports plus exports figure differs slightly from the value given above (over USD 23bn in 2018 at current prices) on account of inflation-adjusted values used for the model estimation (at constant prices)
5 NBP, Foreign direct investment in Poland and Polish direct investment abroad in 2017.