Foreign direct investment: Reinvesting in Poland

A recently released analysis by the National Bank of Poland shows that the nature of foreign direct investment in Poland is changing.

"The structure of FDI in Poland has changed," said Sławomir Skrzypek, the president of the National Bank of Poland. "Profits reinvested by foreign firms already active in Poland comprised the largest type of FDI in Poland," he added.

Such reinvestment made up 41.5 percent of the €12.8 (zł.43.8) billion in FDI that Poland absorbed last year. This amounted to E5.33 (zł.18.25) billion, marking a 22.3-percent higher reinvestment rate than in 2006.

Some 20 percent of total FDI in 2007 was invested in the industrial processing industry. Nearly the same share - 19.8 percent - went into developing R&D, real estate services, IT services or leasing machinery. Some 15.3 percent of last year's FDI went into financial services. Trade and repair comprised 11.9 percent of the total, while transportation, storage and communication services took a 9.4 percent share.

Some 85.3 percent of all FDI last year came from companies based in EU member states - France had a 17.7-percent share, Germany had 17.2 percent, and Austria, Italy and Sweden all had seven to eight percent shares. The largest investors from outside the EU were from the US, which accounted for around 10 percent of all FDI, followed by the Netherlands Antilles, South Korea and Japan.

The amount of FDI in Poland last year was 14.8 percent lower than in 2006, but Skrzypek pointed out that some 20.7 percent (€3.11 billion) of the E15.05 billion invested in Poland in 2006 was qualified as capital in transit. "This does not have any influence on real figures. It flows in and flows out," said Skrzypek.

The share of capital transit in 2007's FDI figures will be known in June.