20 April 2011
3.7 Challenges facing exporters
Domino effects of global recession
Despite a positive portrayal, Poland is clearly not immune to the increasing recession pressures applied by the global credit and consumption squeeze in the short term. This is reflected by the lowest-since-2001 GDP growth of 1.8% for 2009. In particular, the fading out of growth at the European level is presenting challenges to economic growth in the country, given its high export dependence on European markets like Germany (shared 26% of total exports in 2009), France (7%), Italy (7%) and the UK (6%).
Return of migrant workers
Under the cloud of the global economic crisis, many Polish migrant workers working in countries such as Ireland, Norway, the UK and Russia, are among the first to lose their jobs and ending up returning home. This may not only greatly reduce the overseas remittances, a financial lifeline for many Polish households, but also trigger the return of crippling unemployment. On the other hand, while Poland has demonstrated considerable resilience during the global recession and has escaped recession in the past two years, the feeble and uncertain European economy will somewhat affect Poles’ unemployment opportunities aboard, not to mention the lingering European sovereign debt crisis and subsequent austerity measures on the horizon.
Bureaucracy and demand problems
Like many other emerging markets, bureaucracy remains a headache in Poland, while infrastructure deficiency is still bothering importers and exporters in face of the increasing trade traffic. On the other hand, despite higher incomes and a spirit of modernity, product trends and purchasing power in Poland are still lagging behind the West and even Russia. This confines the product assortment to less avant-garde items, while the sizable grey and second-hand market limits the offerings to low to mid-priced ones. Also worth noting is Polish importers’ growing inclination towards direct sourcing from mainland manufacturers, which has been gathering steam as Polish buyers, especially retailers, continue to consolidate in recent years.