A new economic power is emerging in Europe
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- Poland is one of Europe's fastest-growing economies.
- Its economy has continued to grow despite issues faced by its neighbors.
- Some experts put this down to what they call the Polish "entrepreneurial gene."
Polish Prime Minister Donald Tusk took a leaf out of President Donald Trump's book last month, turning to a controversial entrepreneur for support as he pushed for deregulation to help boost the economy.
Presenting his government's economic plan in February, Tusk hailed "the moment when we can overtake everyone."
"The light is visible from Poland," he said. "A breakthrough year means investment, investment, and yet more investment."
Tusk also took the opportunity to announce measures to deregulate the economy, calling on the eccentric Polish businessman Rafał Brzoska to help.
"Do you accept?" Tusk publicly asked the billionaire.
Brzoska — the founder of the parcel locker business InPost, and one of Poland's richest people — accepted Tusk's challenge, emphasizing that he had no political aspirations but that he intended to present 300 recommendations by June 1.
Poland is already one of the fastest-growing economies in Europe. Some experts say exports, consumer behavior, and a well-trained, flexible labor force are the key drivers behind its growth.
For others, however, it's the Polish "entrepreneurial gene."
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Entrepreneurship in Poland
This so-called "entrepreneurial gene" was on full display in 2024, with more than 353,000 new businesses launched in Poland. The country is also one of Europe's hardest-working nations based on average hours worked per week.
Polish workers are "above all, hard-working, well-educated and highly qualified," Krzysztof Inglot, a labor market expert, said, adding that they often rise quickly through company ranks.
He said this had a lot to do with what he called the "entrepreneurial gene," which he said had been carved out under the years of communist rule.
"We jokingly say that Poles are entrepreneurial, that construction workers will always try to find an easier solution to a situation. This is what makes us different from other nations, who often work according to standardized and identical rules. In contrast, we still have this tendency to look for alternative solutions and simplifications," Inglot continued.
Marcin Wojewódka, an expert in labor law and the president of the Pension Institute, agreed, saying Poles could "move mountains" when motivated and able to see the "quick effects of our actions."
"This is not about the proverbial Polish plumber in Western Europe, but precisely about courage and the willingness to take risks if the reward is attractive enough. Poles, perhaps due to the historical experience of our ancestors, are able to grit their teeth, focus on the task at hand, and often even take shortcuts to achieve the desired result," he said.
One such entrepreneur is Kamil Hagemajer, who runs a chain of milk bars in Warsaw, the Polish capital, and Wroclaw, in western Poland.
Known as a "bar mleczny" in Polish, a milk bar is a low-cost café that dates back to the communist era.
"We currently have 20 bars and employ about 200 people," Hagemajer said, adding that he believed the entrepreneurial gene was the Poles' "dominant trait."
"You could see it in the communist years when the first businesses were born in markets or when people took small cars to transport sweaters or jeans from other countries and sell them in Poland as there were no such products in our country."
Looking ahead, Hagemajer said Polish business owners were ready to embrace modern technology to work more efficiently but that they still faced administrative and tax obstacles.
"This means that we have to rely on the knowledge of external companies, which often means that we lose authority over our businesses," he said.
Poland's economy is growing despite issues faced by its neighbors
According to some forecasts, Poland's GDP growth will hit 3.5% this year, up from 2.9% in 2024. By comparison, the German economy is expected to grow by 0.2% this year — according to a January forecast from the German Central Bank.
"Poland is developing faster than Western European countries, and we can count on one hand the years when this was not the case. For various reasons, it is easier for less developed countries to grow quickly and thus catch up in terms of their development," Piotr Bartkiewicz, an economist at Bank Pekao, said.
A large part of the German economy has been focused on the production of traditional combustion-engine vehicles. But strong competition from China and other countries has led to a slump in car sales. High taxes, bureaucracy, and rapidly rising labor costs have compounded the issue, with the German economy not seeing significant growth in five years.
Such issues have potential knock-on effects for Poland.
"Germany is our largest trading partner, accounting for 27% of Polish exports. Exports to the next countries on the list are over four times less. Therefore, German stagnation is a serious problem for exporters, even if they increase their market share in other countries and look for new sales markets," Grzegorz Ogonek, an economist at Santander Bank Polska, said.
Poland is also facing the potential impacts of an aging population — something the country's Minister for Senior Policy, Marzena Okła-Drewnowicz, said would be "a great challenge" moving forward.
"We need to be open to new technologies. The labor resources in Poland are steadily shrinking, despite an influx of immigrants, which does not help economic growth," Ogonek added.
3 reasons the Polish economy is growing
Despite such headwinds, the Polish economy has kept growing, with economists pointing to three key driving forces.
Firstly, Polish exporters are finding new niches in foreign markets and are competitive despite increasing labor costs and the strengthening of the Polish zloty (PLN).
"The EU is, of course, the largest market for Poland, but not the only one. In the macroeconomic data, we see an increase in exports to other markets, such as Asia, the Middle East, or North America. Polish exports are also diversified and cover a wide range of products, including food products," Bartkiewicz said.
Polish consumers were also less affected by the energy crisis and increased inflation. Despite relatively high inflation, the decline in real household income in Poland was one of the smallest in the EU due to fiscal stimulation and high wage growth.
As a result, there was a moderate decline in private consumer spending, as well as a faster return to growth and more regular consumer patterns — a process that is only just beginning in other parts of Europe.
Thirdly, relatively high public investments (financed, among other sources, by EU funds) have been an additional catalyst.
"This last factor will be crucial in 2025," Bartkiewicz said.
It is this balance between exports, domestic consumption, and investments financed by EU funds that seems to be allowing the Polish economy to grow.
"Regardless of what is happening in the global economy, one branch of our economy is always working," said Marcin Klucznik, senior advisor in the global economy team at the Polish Economic Institute.