GUS reveals surprising trade deficit with Germany

Germany is Poland's largest export market accounting for 27% of Poland's exports, so the figures came as a major surprise. Economists and companies differ in their interpretation of the news. According to Wojciech Mroczek, economist at the Foreign Trade Institute (IKiCHZ), the reversal is due to sharp rises in German direct investment in Poland, which drives imports. Also, successful Polish exporters no longer need use Germany as their gateway to Western Europe. Maciej Grabowski of the Market Economy Institute (IbnGR) echoes these views, adding booming domestic demand means many firms put less stress on export-led expansion. But company representatives point to aggressive competition from German companies defending their markets, as well as rising costs due to higher materials prices and salary growth. (Dziennik, Wall Street Journal supplement, p. 3) R.M.