Exports as a percentage of domestic GDP reached an all-time high of over 60 per cent at the end of Q1 2023.
Polish exports of goods and services year to date reached an all-time high of over EUR 430 billion at the end of Q2 2023. Their value grew by 52 per cent compared to 2019, which was equally attributable to higher sales of goods and service revenue.. The year 2019 is an important benchmark as the following years saw three significant events that negatively affected international trade: the UK left the European Union at the beginning of 2020; the economy was then paralysed for several months by the coronavirus pandemic; and Russia launched its aggression against Ukraine in early 2022.
Brexit and the war in Ukraine affected countries that were among the top ten markets for Polish exports. As a result of the UK’s exit from the EU, the importance of the UK for Polish exports declined slightly. Six per cent of exported goods went to the UK in 2019, making it Poland’s third largest export market.
This year, France joined the top three countries, taking over some of the UK’s share. However, exports to the UK by value in the first seven months of 2023 were more than 20 per cent higher than in the same period of 2019. Germany, for which the UK is also one of the top export markets, now sells goods in the UK at a lower value than four years ago.
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As another example of Poland’s success as an exporter, sales to Germany have been rising. In recent years, Poland has overtaken France in terms of the value of goods sold in Germany, even though trade between these two most important euro area countries has a much longer tradition, and they both share the same currency. According to the German statistical office, imports from Poland amounted to EUR 77.4 billion in 2022. Germany only buys more from China, the Netherlands, and the United States.
One important driver of the success of Poland’s exports is their diversity. The United Nations agency UNCTAD annually calculates concentration indices which track the distribution of a country’s exports by group of goods. Poland has in recent years been regularly ranked at the top of the list and came first globally in 2022. This means that domestic exports are not significantly dependent on any single group of goods. For comparison, at the bottom of the list of European countries is Slovakia, which mainly exports cars and car parts. Norway is Europe’s worst performer in terms of export diversification as it predominantly sells oil and gas.
Domestic exports have been growing in recent years, not only in nominal terms, but also in terms of their increasing importance to the domestic economy as measured by the ratio of exports to GDP. Exports accounted for 53 per cent of all goods and services produced in Poland at the end of 2019. In just over three years, the ratio has risen to an all-time high of over 60 per cent based on data for 12 consecutive months.