Poland’s 12-month trade balance for goods and services reach a record-high surplus of 7% of GDP in January, according to preliminary data from the central bank.
The country’s current account, which tracks the economy’s balance with foreign countries, has improved over the past year, boosted by exports of electronics, a steady flow of foreign investment, and EU funds.
BUM! Polska gospodarka weszła w styczniu na nowy poziom. Nadwyżka w handlu zagranicznym (towary + usługi) osiągnęła (w ujęciu 12M) wg naszych szacunków 7% PKB. Nie musimy chyba dodawać, że to rekord! pic.twitter.com/VMmTSCoPKJ
— PKO Research (@PKO_Research) March 16, 2021
The current account, which is calculated as the net sum of trade and capital transfers, reached a surplus of 14.8 billion zloty (€3.2 billion) in January, according to the announcement by the National Bank of Poland (NBP) this week.
The composite measure includes a surplus in traded goods (3.8 billion zloty), services (10.8 billion zloty) and primary income (2.6 billion zloty) as well as a deficit of secondary income (2.4 billion zloty).
At this time last year the value of Poland’s current account was also positive, but at a lower level of 11.8 billion zloty, reports Business Insider Polska.
Over the 12 months to the end of January, Poland exported 87 billion zloty of goods, which is 3.2 billion zloty more than for the same period a year earlier. The value of Poland’s exports was bolstered by sales of automotive batteries, wireless communication devices, refined copper, TV sets and vans, reports Business Insider.
Poland mainly exports machinery and appliances – such as computers, video displays, gas turbines and insulated wire – which together constituted almost a quarter (24.4%) of total export value in 2019. The country also notably sells vehicles and their parts, metals, foodstuffs, pharmaceuticals and furniture abroad.
Germany is Poland’s largest trading partner, accounting for 26.7% of exports in 2019, followed by the Czech Republic (6%), the UK (6%) and France (5.8%), according to the Observatory of Economic Complexity.
Over the past year, imports of goods increased by one billion zloty, reaching 83.2 billion zloty. The rise was driven by gaming equipment, inorganic chemicals, TV sets, electric batteries and road tractors. The resulting difference between total imports and exports of goods over the past year was 3.8 billion zloty.
Poland mainly imports machines (25.6% by 2019 value) – including broadcasting equipment (1.9%), office machine parts (1.4%) and integrated circuits (1.1%), according to the Observatory of Economic Complexity. The country also brings in cars and parts (10.1%) and mineral fuels and oils (6.9%).
A quarter of Poland’s imports come from Germany, followed by Italy (5.4%), the Netherlands (4.8%) and Russia (4.3%).
Turning to net trade of services, Poland accrued revenue of 22.2 billion zloty from such exports over the past 12 months, which was 1.4 billion zloty less than in the previous year. The country imported services for 11.4 billion zloty, which was 1.6 billion zloty less than in the previous year.
Primary income was mainly driven by foreign investors bringing 6.1 billion zloty of capital into the country, as well as an inflow of 10.3 billion zloty of funds from the European Union’s Common Agricultural Policy, mainly as direct payments to farmers.
In total, the EU transferred 15.5 billion zloty to Poland. The remaining 5.1 billion zloty coming from the European Regional Development Fund and the Cohesion Fund was registered in the capital, rather than current, account of the balance of payments.
After account for Poland’s payments to the EU, its net balance was 12.3 billion zloty between January 2020 and 2021.
Main image credit: sergio souza on Unsplash
Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.
