Foreign direct investment in Poland resisted the pandemic
According to the final data from the National Bank of Poland, foreign direct investment in Poland in 2020 amounted to PLN 54 billion. This is 2.3 percent of our country’s GDP at that time.
In comparison with the previous year, the capital inflow increased by PLN 2.1 billion (4 percent). Globally, the value of such transactions decreased by 1/3, which was a consequence of the pandemic.
Who conducts foreign direct investments in Poland
As in previous years, the majority of foreign direct investment was reinvested profits. In 2020, they amounted to PLN 44.2 billion.
On the other hand, entities from outside Poland allocated PLN 16.8 billion for the purchase of new shares and capital infusion. The balance of transactions was lowered by repayment of liabilities (PLN 7 billion) by domestic companies to foreign parent companies.
In the period in question, the largest foreign direct investments in Poland were made by institutions from:
- Netherlands – PLN 13,8 billion net,
- Luxembourg – PLN 9 billion,
- Germany – PLN 8,4 billion.
In turn, the most capital returned to owners from France, who withdrew a total of PLN 5.4 billion. This was related to the reorganization of the hotel industry company.
At the end of 2020, the value of receivables from foreign investments conducted so far amounted to PLN 938.6 billion. In annual terms, this means an increase of less than 25 billion PLN. Most capital was invested in our country by investors from:
- Germany – 20 percent of the total,
- France – 9 percent,
- USA – 9 percent.
Polish investments abroad in the red
In the first year of the pandemic Polish investments abroad amounted to 5.1 billion PLN. Most capital was invested by Polish companies in Sweden (PLN 1.6 billion net), Cyprus (PLN 1.2 billion) and the Czech Republic (PLN 0.7 billion).
Compared to the previous year, the balance of transactions decreased by 29 percent. This was largely due to lower income of our foreign companies. This translated into their smaller reinvestments. Also significant was the restructuring of debt (repayment of bonds) using foreign subsidiaries.
At the end of 2020, all investments made abroad by Polish companies amounted to PLN 105.7 billion. In this respect, 2016 was the record year, when the balance of receivables of Polish entities amounted to PLN 116.5 billion.
New record of foreign investments in Poland
Preliminary balance of payments data shows that 2021 was a record year for foreign direct investment in Poland. After 11 months, they were estimated at PLN 111.9 billion. So far, the best result our country has achieved in 2016, when it attracted a net PLN 61 billion.
Such a dynamic inflow of capital last year could be the result of a phenomenon known as shortening of supply chains. Due to logistical difficulties, investors are shifting production closer to their home markets. So they accu