Economic Transformation and Investment

The economic transformation initiated in Poland during the 1990s attracted numerous foreign investors, with French companies quickly recognizing the potential of the developing market. French investments have significantly contributed to the modernization of various sectors, including energy, telecommunications, and automotive. In 2022, France ranked second only to Germany in terms of foreign capital invested in Poland.

Strength of the French Economy

France is the sixth largest economy globally and the third largest in Europe, following Germany and the United Kingdom. According to World Bank data, France’s GDP was $2.779 trillion in 2022, with forecasts predicting an increase to $2.799 trillion by 2024. The GDP per capita in France was $40,886.3 in 2022, compared to $18,688 in Poland. France was the world's eighth largest exporter in 2022, with exports totaling $608 billion, an increase of $83.9 billion over the past five years.

Trade Between Poland and France

Since Poland’s accession to the European Union, trade with France has increased almost fivefold. France is a leading trading partner for Poland, with Polish exports growing twice as fast as imports. Poland has maintained a positive trade balance with France for several years. In 2023, the positive trade balance amounted to €8.4 billion.

French Investments in Poland

French investments are prevalent across various sectors in Poland. In 2022, the cumulative investments of French companies amounted to approximately PLN 108 billion, accounting for over 9% of total FDI in Poland. Since 2017, French investment in Poland has increased by about a third, with nearshoring during the COVID-19 pandemic strengthening trade relations further. French companies are increasingly reinvesting their profits in Poland, with the reinvestment rate rising to nearly half of annual profits from 2019 to 2022.

Key Sectors for French Capital

French investments are prominent in several sectors:

• Manufacturing: Includes food, automotive, transport equipment, pharmaceuticals, electrical equipment, and cosmetics.
• Services: Information and communication, telecommunications, media, IT, business services, banking, and finance.
• Real Estate and Logistics: Real estate development and transport.
• Construction: A smaller yet significant share.

In 2022, nearly 1,200 entities with French capital operated in Poland, primarily concentrated in the Mazowieckie Voivodeship.

Employment from French Investments

French investments have been crucial in job creation, with 227,000 direct jobs by 2022 and an equal number through local partnerships. Two-thirds of French-capital companies regularly collaborate with at least 100 Polish partners, integrating them into global supply chains. In 2022, France was the third largest foreign employer in Poland.

Future of Polish-French Economic Cooperation

The Polish-French partnership has substantial potential for growth in several strategic areas:

• Energy Transition: France is a leader in renewable energy, ranking fourth in the EU for electricity production from renewable sources in 2022.
• Defense: France is a major global supplier of military technology, the second-largest arms exporter between 2019 and 2023.
• Digitization and Automation: France ranks second in the EU for R&D expenditure in the ICT sector.
• Innovation and Infrastructure Development: France is a European leader in innovation, with industrial companies investing significantly in R&D.

Polish companies have a significant opportunity to expand exports to France, especially in sectors like food production, furniture, wood products, and metal products, where they have competitive advantages.

Conclusion

France’s substantial investments in Poland have played a critical role in the country’s economic development, contributing to various sectors and creating numerous jobs. The strong trade relationship and potential for further cooperation indicate a promising future for Polish-French economic ties.

Sources:

• The French-Polish Chamber of Commerce report
• National Bank of Poland
• Central Statistical Office
• The Polish Investment and Trade Agency