Business opportunities in PolandDawid Tomaszewski

Political-Economic Section

Embassy of the Republic of Poland

Jelgava, December 01, 2010

Poland - Key Facts

Area: 322 575 sq km – 6th in European Union

Population: 38,12 million – 6th in European Union

Currency: Polish Zloty (1 EUR ~ 4.00 PLN) 1 LVL ~ 5.55 PLN)

GDP growth: 6.7% (2007), 4.8% (2008), 1.7% (2009)

Membership: EU, NATO, OECD, WTO, Schengen Zone

Stable and fast economic growth (GDP in bn USD)

Beginning oftransformation

Entry into the NATO

OECD

WTO

Schengen

Poland joins the EU

0

100

200

300

400

500

Source: International Monetary Found, World Economic Outlook Database, Oct 2007

Competitive Advantages

Location & economic fundamentals

strategic location in continental Europe part of trans-european transportation corridor the only country with the positive GDP growth in 2009 in EU (1.7%) 38 million of consumers

Investment incentives14 Special Economic Zones over 110 bn USD from EU

Labor force young, well-educated work force ca 11% of university students in the EU 456 universities & high education schools

1000 km radius

250 mn people

2000 km radius

550 mn people

GDP growth• 4.8% in 2008 vs 0.8% in the EU• 1.7% in 2009 vs -4.2% in the EU• 2.2% forecasted in Poland vs

0.7% in the EU for 2010 (IMF)• domestic demand - the main factor

behind the growth

Inflation (CPI) and interest rates

Source: Ministry of Finance, NBP, Eurostat 2010

Poland: Encouraging Macro-economic Picture

-5

-3

-1

1

3

5

7

2002

2003

2004

2005

2006

2007

2008

2009

%

EU27 Euro Zone Poland

GDP growth rate

Inflation • 4.0% in 2009 vs 1.0% in EU• direct inflation targeting since 1999 - target of 2.5% +/-1%

0

2

4

6

8

10

12

2002 2003 2004 2005 2006 2007 2008 2009 2010

%

CPI NBP reference rate

„Velvet crisis” in Poland

Reasons according to Prof. Leszek Balcerowicz:

1. Stricter banks’ credit policies before crisis compared to other countries

2. No dynamic growth of foreign debt as in other countries

3. Financial instruments far less sophisticated as in the USA

4. Smaller influence of stock market on the economy than in the USA

5. Falling natural resources prices

Poland is much less affected by the crisisthan neighbouring countries

0

10

20

2004

2005

2006

2007

2008

2009

2010

%

Source: GUS 2010

Over 20%

10/201011.5%

Poland: Falling Unemployment

443

171

88

132

453

65

289 21

58

0

50

100

150

200

250

300

350

400

450

500

Humanities &social

sciences

Science ICT Engineering B&A and Law

tho

usa

nd

s

Students

Graduates

Study in Poland

POZNAN

WROCLAW

WARSAW

KRAKOW

LODŹ

SZCZECIN

TRICITY

KATOWICE

BYDGOSZCZ-TORUN BIALYSTOK

LUBLIN

RZESZOW

Main academic centers

Source: Polish Statistical Office 2009

Knowledge of Foreign Languages

57% Poles is able to speak at least one foreign language,

• 32% of Poles speak two, • 4% - three languages.

Similar situation in EU: • 56% of EU citizens speak

one foreign language,• 28% - two languages.

Percentage of young Poles speaking foreign languages

Learning of foreign languages is obligatory in the Polish education system

Source: Eurostat 2006, TNS Opinion & Social (UK) December 2006, Ranstadt 2008

97%

59%

37%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

English German Russian French

Special Economic Zones

A special economic zone (SEZ) is a designated area in which manufacturing or distribution activities can be conducted on preferential terms

The purpose of SEZs is to support regional development Currently, there are 14 SEZs in Poland, each consisting of

several subzones Total area of all SEZ – 20 000 hectares SEZ will operate until 2015-2017 and more Permits to conduct activities in SEZ are issued by the authorities

of each SEZ Possibility of including the land selected by an investor into SEZ

Benefits from obtaining a permit to conduct activities in SEZ :•eligibility for income tax exemption – a form of regional aid•plot of land prepared for an investment project, available at a competitive price•free assistance in dealing with formalities relating to the investment project

Road network in Poland, 2006

Under construction

ready

Gdansk

Warszawa Poznan

Wroclaw

EURO 2012 in Poland

Road network, 2012.

Under construction

ready

Cooperation

Polish export to Latvia in 2009 was 551,81 ml EURPolish import from Latvia in 2009 was 125,10 ml EUR

(balance 426,71 ml EUR – 4,4x)

Export to Latvia in January-June 2010 was 304,26 ml EURImport from Latvia January-June 2010 was 79,12 ml EUR

(balance 225,14 ml EUR – 3,8x)

Dynamics in January-June 2010 was 114% (import and export)

Polish export to Latvia (January-August 2010)

Poland – 4 on the list of Latvian import partners

Polish import from Latvia (January-August 2010)

Poland – 6 on the list of Latvian export partners

Investment

• Polish FDI stock to Latvia in the end of IIQ of 2010 was 5,83 ml EUR (3,41 ml EUR in wholesale and retail trade, 1,99 ml EUR in manufacturing and 0,43 ml EUR in real estate)

• Latvian FDI stock to Poland in the end of IIQ 2010 was 32,73 ml EUR (all in wholesale and retail trade)

Source: Bank of Latvia

Who we are?How to get information?

Thank you for your attention

Embassy of the Republic of PolandPolitical-Economic Section

Riga, Mednieku iela 6b, 1010 LVtel. (371) 6703 15 24, fax (371) 6703 15 49

e-mail: weh@poltrade.lvwww.poltrade.lv