poland 2014 report on foreign trade

POLAND 2014 – REPORT ON FOREIGN TRADE

MINISTRY OF ECONOMY

POLAND 2014

REPORT ON

FOREIGN TRADE

WARSAW 2014

Prepared by:

Ministry of Economy Strategy and Analyses Department Kazimierz Miszczyk (Coordinator of the Foreign Trade Analyses Unit), Małgorzata Mendyk-Zelman, Jerzy Rutkowski, Monika Walczak

under the supervision of: Aneta Piątkowska – Director of the Strategy and Analyses Department Maria Szkutnicka-PieniąŜek – Deputy Director of the Strategy and Analyses Department

ISSN 1643-2703


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Table of contents

Synthesis ................................................................................................................................................. 5

1 Changes in external and internal conditions ....................................................................................... 9

1.1 External conditions ...................................................................................................................... 9

1.1.1 Situation in the global economy and on the main markets in 2013 .......................................... 9

1.1.2 Changes in world prices and exchange rates ........................................................................ 12

1.1.3 Situation in global trade ......................................................................................................... 13

1.1.4 Current situation and development prospects for the global economy and selected markets 21

1.2 Internal conditions – general situation of the Polish economy ................................................... 28

2 Long-term changes in merchandise trade......................................................................................... 33

2.1 Changes during the transformation period................................................................................. 33

2.2 Changes in trade since Poland’s EU accession......................................................................... 35

3 Scale and dynamics of trade in goods in 2013................................................................................. 41

3.1 Trade according to data of the NBP........................................................................................... 41

3.2 Trade according to data of the CSO .......................................................................................... 44

4 Changes in the geographical structure of trade in goods.................................................................. 47

4.1 Changes seen from the continental perspective ........................................................................ 47

4.2 Changes in main groups of countries ........................................................................................ 48

4.2.1 The European Union.............................................................................................................. 50

4.2.2 Non-EU developed markets................................................................................................... 52

4.2.3 Commonwealth of Independent States.................................................................................. 53

4.2.4 Other developing countries (except the CIS) ......................................................................... 55

5 Changes in the commodity structure of trade in goods ..................................................................... 59

6 Designation of imported goods ......................................................................................................... 73

7 Services in Polish foreign trade......................................................................................................... 75

7.1 Geographical structure of the Polish foreign trade in services ................................................... 76

7.2 Subject matter structure of the Polish foreign trade in services ................................................. 78

8 Foreign trade in the first half of 2014 ................................................................................................ 83

9 Forecasts for 2014............................................................................................................................ 91

Annex 1.................................................................................................................................................. 95

Impact of imports of energy raw materials on total Polish import expenditure in years 2003-2013........ 95

List of tables......................................................................................................................................... 100

List of charts......................................................................................................................................... 101


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SYNTHESIS The global economic recovery predicted by the IMF at the end of 2012 has failed to materialize in 2013. Instead of the expected global GDP increase in 2013 to a level of 3.6% (compared to 3.5% in 2012), the GDP has actually decreased, attaining the level of 3.2%. The economic slowdown affected mature economies to a slightly lesser extent (down from 1.4% to 1.3%) compared to emerging and developing economies (down from 5.1% to 4.7%). The original economic growth forecasts for the Eurozone – which remains a key export market area for Poland – had to be adjusted to an ever greater extent. Instead of overcoming the recession during the autumn of 2012 and embarking upon a path of economic growth in 2013, the economic downturn has continued, even though the pace thereof has decreased from 0.7% to 0.4%. Although the US economy – unlike the Eurozone – experienced another period of GDP growth in 2013, the pace thereof has declined from 2.8% to 1.9%. The CIS countries have experienced an even more notable growth slowdown (down from 3.4% to 2.2%), including, in particular, the Russian Federation (down from 3.4% to 1.3%). The economic downturn on emerging and developing markets has coincided with a certain decrease in the pace of import absorption growth on those markets (down from 5.8% in 2012 to 5.6% in 2013). The developed markets, on the other hand, experienced a significant increase of the pace of goods and services import growth (from 1.1% to 1.4%). The increased import absorption of those markets, combined with the fact that the markets in question account for a dominant share (82%) of Polish exports, has resulted in a substantial increase of the pace of export growth, from a mere 5% in 2012 to 8% in 2013. The notable gain in exports, combined with a consistently slow pace of import growth in 2013 has resulted in a further, significant reduction of the merchandise trade deficit, which has plunged from over EUR 10.6 billion in 2012 to barely EUR 2 billion in 2013. Whereas in 2012 the pace of growth of export to developed markets barely reached the level of 2.4% – more than two times less than the overall average export growth, in 2013 the gain in exports to these markets proved to be three times greater than in the previous year and only slightly smaller than the overall average export growth. The pace of export growth to EU markets has increased from 2.3% in 2012 to 6.3% in 2013. The economic recovery was particularly notable with respect to exports to the Eurozone markets. Whereas in 2012 the exports to the Eurozone has risen by a mere 0.7%, in 2013 the pace thereof has increased to 5.6%. This has been the consequence, inter alia, of a significant increase of the pace of growth in exports to Germany, rising from a mere 1.1% in 2012 to nearly 8% in 2013. However, the pace of growth of exports to CIS markets has concurrently experienced a threefold decrease, with a fourfold slowdown in exports to the Russian Federation (down from 25% in 2012 to slightly above 6% in 2013). The significant recovery in terms of exports to EU markets in 2013 has coincided with a further, substantial improvement in terms of the balance of exchange (up from EUR 20.7 billion in 2012 to EUR 24.5 billion in 2013). Favourable changes and tendencies in terms of exports to developed markets, including, in particular, EU markets, which have occurred in the previous year may, on one hand, serve as testimony to the relatively high degree of competitiveness and potential of Polish exporters in terms of their capacity to adjust to the stricter requirements in terms of demand which exist on these

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challenging markets, while on the other hand it also proves the key position of the markets in question insofar as the development of Polish exports is concerned in the nearby perspective, even despite the occasional business fluctuations. Year 2013 also brought about changes in terms of export dynamics with respect to the most significant groups of commodities. The increased intensity of the export of electromechanical goods deserves a special mention. The most notable increase was recorded for section XVII which includes vehicles, aircraft and vessels. Following a substantial downturn experienced in 2012 (down by over 6%), year 2013 brought about a significant increase in terms of exports, which have risen by over 10%, not only resulting in the original level of exports from 2011 becoming restored, but also ensuring an increase thereof to a level of approximately EUR 22.6 billion, i.e. over EUR 0.7 billion more than two years ago. While this has translated into an improvement in terms of the balance of exchange in this section, reaching a level of over EUR 5.7 billion compared to approximately EUR 5 billion in 2012, due to the coinciding import revival the relatively high surplus levels recorded two years ago (EUR 6.6 billion) could not be attained. A significant increase of the scale of exports was also experienced in the chemical industry products group, including, in particular, the plastics and plastic products section (section VII). The pace of export growth in this particular group increased by approximately 3 p.p. in 2013, reaching the level of 9%; in absolute terms this has resulted in a rise in the value thereof amounting to more than EUR 1.8 billion. As a consequence, the deficit in this group of products (which had traditionally remained high) has decreased even further, down from EUR 6.3 billion in 2012 to approximately EUR 5.7 billion in 2013. Favourable trends in terms of agricultural products and foodstuffs have persisted for another year in a row. The export volume in this commodity group has exceeded the level of EUR 20 billion in 2013, attaining the value of nearly EUR 20.5 billion. Even though the pace of growth of the exports of agricultural products and foodstuffs in 2013 has dropped slightly (down from 17.5% to 14.5%), it remains the highest among all commodity groups, while the increase in exports in absolute terms has exceeded EUR 2.5 billion. At the same time, the surplus of trade in the commodities in question has increased from EUR 4.3 billion in 2012 to over EUR 6.1 billion. A slight recovery was experienced in terms of imports. The average growth rate increased by 0.9 p.p., reaching the level of approximately 2%. The most significant increase – both in terms of growth rate (up by 5 p.p.) and in terms of scale (an increase by EUR 2.9 billion) – was experienced in the electromechanical goods group, resulting from both the concurrent export revival and the extensive intra-industry cooperation which exists within this commodity group. Against this background, a significant plunge in mineral imports – including, in particular, crude oil and gas – has to be pointed out (down by approximately EUR 2.3 billion). The merchandise trade in 2013 has taken place in relatively stable and generally neutral price and exchange rate conditions. The annual average nominal exchange rate of the Polish zloty against the Euro – the dominant currency in the settlements pertaining to exports – has decreased slightly in 2013, falling by approximately 0.3%, which has translated into a slight increase of transaction prices in exports, thereby having a benign influence on exports, especially since the domestic prices of sold output in the industry have concurrently fallen by 1.3% on average. The nominal exchange rate of the zloty against the US dollar has increased by approximately 3% in 2013, which could have had a measurable impact on the slackening of export growth to emerging and less developed markets, since such transactions are settled in US dollars.


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Due to the significant margin of uncertainty as to the chances of a definite reversal of economic trends in the global economy and of a decisive move away from recession and onto the path of economic growth, at the present stage it is difficult to predict whether year 2014 might bring about a further increase of economic growth and a substantial rise in demand for imported goods on the primary EU markets which are of key significance for the purposes of ensuring that Polish exports continue to rise. One may, however, speculate that retaining the export growth rate for 2014 at a level similar to that which had been experienced last year, i.e. between 8 and 10%, is a realistic prospect. At the same time, however, the growth rate is also expected to increase significantly, reaching a level of approximately 1-2 p.p. below the export level. This is a consequence of a further improvement (or at least stabilization) of the market situation in the closest vicinity of the Polish economy.


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1 CHANGES IN EXTERNAL AND INTERNAL CONDITIONS

1.1 External conditions

1.1.1 Situation in the global economy and on the main markets in 2013 In 2013 – the fifth year since the outbreak of the financial and economic crisis – significant uncertainty as to the further development of the situation on most key Polish export markets still persisted. Significant volatility of the situation on global markets in 2013, especially in the Eurozone, was reflected in the subsequent forecasts of the International Monetary Fund. An increase in global product in 2013 at the level of 3.6%, predicted in October 2012, has decreased to 3.3% in April 2013 and was adjusted to 2.9% in the fall forecast. In the end, according to the latest data from July 2014, the global GDP in 2013 has increased by 3.2% (compared to a 3.5% increase in 2012). However, the second half of 2013 brought about an improvement in terms of the global economic situation, mostly due to the economic recovery which occurred in developed countries. Whereas economic growth in developing and emerging countries (which amounted to 4.7%) remained significantly higher than in developed countries (by 1.3%), the decrease thereof was more substantial than in the latter group – in 2012, GDP growth on emerging and developed markets amounted to 5.1% and 1.4% respectively. Table 1 Changes in global GDP and in selected markets in the years 2012-2013

2012 2013

World 3.5 3.2 Advanced economies 1.4 1.3 United States 2.8 1.9 European Union -0.3 0.2 Euro Area* -0.7 -0.4 Germany 0.9 0.5 Japan 1.4 1.5 Emerging market and developing economies 5.1 4.7 Commonwealth of Independent States 3.4 2.2 Russia 3.4 1.3 Middle East and North Africa** 4.9 2.5 Sub-Saharan Africa 5.1 5.4 Latin America and Caribbean 2.9 2.6 Emerging and developing Asia 6.7 6.6 China 7.7 7.7 India 4.7 5.0 ASEAN-5*** 6.2 5.2

* excluding Latvia; ** including Afghanistan and Pakistan; *** Indonesia, Malaysia, Philippines, Thailand, Vietnam; Source: Strategy and Analyses Department of the Ministry of Economy on the basis of IMF data from April and July 2014.

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The group of developed countries has noted a recovery with respect to the most important recipient of Polish exports – the EU markets, where GDP has increased throughout the entire year 2013 by 0.2%, after decreasing by 0.3% in 2012. Economic growth has been recorded on the markets in question from Q3, 2013 onwards. The economy of the Eurozone has experienced a less dynamic growth; GDP growth was recorded only in the 4th quarter of 2013, while throughout the entire year it has decreased by 0.4%, compared to a 0.7% decline in 2012. Results for the 1st quarter of 2014 show that GDP growth in the EU and in the Eurozone has accelerated. Although the economic growth in the United States has dropped to 1.9% (compared to 2.8% in the previous year), in the second half of 2013 it has managed to significantly pick up the pace, mainly as a result of the dynamic growth in exports and the temporary increase in reserves. In Japan, the GDP growth amounted to 1.5%, which was slightly higher than in the previous year when it amounted to 1.4%. The economic recovery experienced in developed countries, in particular on EU markets, is likely to be maintained and the subsequent quarters of 2014 should bring about an increase in terms of economic growth. In 2014, the economic growth on developed markets is predicted at the level of 1.8%; in the USA it is expected to reach the level of 1.7%, in the EU – the level of 1.6% and in the Eurozone – the level of 1.1%. However, these forecasts are subject to a certain degree of uncertainty, mainly in the context of the escalation of the crisis in the Ukraine and its impact on the relations between the EU, the United States and the Russian Federation. The slackening of economic growth in developing and emerging countries throughout the whole year was largely the result of the decreased growth rate in the second half of the year, resulting from the impact of two opposing trends. On the one hand, exports have increased, fuelled by the economic recovery in developed countries and currency depreciation, while on the other hand the level of investment has dropped. GDP growth in the Chinese economy amounted to 7.7% (similar to the previous year). The Indian economy has accelerated and recorded an increase of 5%, as compared to 4.7% in 2012, whereas a decline has been recorded in South-east Asian countries – ASEAN-5, where in 2013 GDP grew by 5.2%, i.e. 1 p.p. less than in the previous year. Despite this fact, the Asian markets still remain world leaders with respect to economic growth. A significantly higher decline in growth was recorded in the countries of the Commonwealth of Independent States, especially in Russia – from 3.4% in 2012 to 1.3% in 2013. The current situation of the Russian economy indicates that in 2014 Russia may experience a near-zero economic growth. Despite the fact that throughout the several previous years global trade has been highly sensitive to disruptions of the economic cycle, in 2013 global trade has increased by 3.1%, i.e. slightly more than in the previous year (when it has grown by 2.8%), despite a slight decline in the global GDP growth. The results achieved in 2013 have confirmed the trend which involved a more dynamic growth in terms of turnover in developing economies that could be seen in the last couple of years. The export of goods and services of these countries grew by 4.4% (as compared to 4.2% in the previous year), while in developed countries the growth thereof amounted to 2.3% (2.1% in 2012). The imports on developed markets has grown by 1.4%, as compared to 1.1% in the previous year, while on developing markets import growth has remained at the level from the previous year, i.e. 5.7%. As a consequence of the dominant position of EU markets with respect to Poland’s foreign trade turnover (accounting for 75% of exports and 58.5% of imports), the economic conditions prevailing on


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the market in question constitute the primary determining factor for our foreign trade activities. The changes which have occurred with respect to this group of markets are relatively favourable and are therefore welcomed with enthusiasm. According to Eurostat data, the EU GDP has increased by 0.1% during the entire year 2013, following a 0.4% decline experienced in 2012. The recovery on these markets has become apparent in the second half of 2013 and during the first months of 2014. Following the GDP decrease recorded on the EU markets since Q2 2012, the third quarter of 2013 brought about a slight increase thereof (up by 0.2%); this trend has picked up the pace in Q4 2013 and Q1 2014, with the GDP increasing by 1.1% and 1.4% respectively. The Eurozone economy is growing at a slightly slower pace; a GDP increase was only experienced in Q4 2013, following the continuing GDP decline recorded from the beginning of 2012 onwards. Throughout the entire year 2013, the GDP of the Eurozone has decreased by 0.4%, following a 0.7% decrease in 2012. In Q1 2014 the GDP increase in the Eurozone amounted to 0.9%. Compared to the entire Eurozone, the situation in Germany was relatively encouraging, since even though the GDP growth on the annual scale amounted to 0.4%, the subsequent quarters of 2013 brought about an increase in the pace thereof, amounting to 1.4% and 2.3% in Q4 2013 and Q1 2014 respectively. The economic results were even better on the UK market – Poland’s second-biggest export partner – which has managed to avoid an economic slump within the last two years. However, whereas in 2012 the GDP growth of the UK slowed down to 0.3%, the beginning of 2013 brought about an increase in the growth rate thereof, reaching the value of 1.7% (including 2.7% in Q4) and 3.1% in Q1 2014. Table 2 Changes in domestic demand in major markets in the years 2012-2015

2012 2013 2014* 2015*

European Union -1.5 -0.4 1.4 1.9 Euro Area -2.2 -0.9 1.0 1.7 Germany -0.3 0.7 1.8 2.2 France -0.9 0.2 1.0 1.7 Italy -5.0 -2.7 0.3 1.3 United Kingdom 1.2 1.8 2.5 2.4 Netherlands -1.6 -2.5 1.0 0.7 Spain -4.1 -2.8 0.4 1.6 Sweden 0.3 1.6 3.1 3.1 Austria 0.1 -1.2 1.1 1.5 Czech Republic -2.9 -0.8 1.0 2.0 Slovakia -4.5 -0.9 1.7 2.5 Hungary -3.5 0.8 2.5 2.2 POLAND -0.1 -0.1 3.3 3.6 Norway 3.5 3.1 n/d n/d United States 2.6 1.7 2.6 3.5

* forecast; n/d – no data available Source: Strategy and Analyses Department of the Ministry of Economy on the basis Eurostat data from April and July 2014.

The fluctuations in internal demand on the markets of our trading partners have a decisive influence on the Polish export dynamics. Throughout the entire year 2013, the demand in the EU and the Eurozone have decreased by 0.4% and 0.9% respectively; however, the results for those markets which pertain to the second half of the year show a continuous improvement. The pace of the decline in EU internal demand experienced since the beginning of 2012 has decreased in Q2 2013 and amounted to 0.9%. During the two subsequent quarters, a demand growth amounting to 0.2% and 0.7% respectively has

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been recorded. In the Eurozone, on the other hand, a decrease in demand could be seen as late as during the third quarter (down by 0.4%); it is only in Q4 that this trend has been reversed. The demand levels of the German economy have begun to rise as early as Q2 2013, resulting in a 0.7% increase on the annual scale, compared to a 0.3% decrease recorded in 2012. In the UK, the demand growth has increased from 1.2% in 2012 to 1.8% in 2013. In the Czech Republic – the third-biggest among all Polish export markets, year 2013 brought about a slower decline in demand (down to 0.8% compared to a 2.9% decline in 2012).

1.1.2 Changes in world prices and exchange rates According to the estimates of the World Trade Organization, in 2013 the global prices of commercial goods were on average 2% lower than in the previous year, thereby carrying over the trend already present in 2012, where the prices in question decreased by 3%. The last two years brought about a decrease in global prices of many basic products. According to IMF data, the annual average industrial product prices decreased by 1.1% in 2013 (in US dollar terms), while the prices of basic goods (excluding fuels) went down by 1.2%. At the same time, the prices of crude oil continue to remain at a relatively stable – albeit high – level, fluctuating at an annual average level of 104-105 dollars per barrel in the years 2011-2013. The IMF estimates that in 2014 the average crude oil prices will remain at a level of above 104.17 USD/bar., i.e. 0.1% higher than in 2013. The annual average energy price throughout the entire year 2013 was 2% lower than in the previous year. During the final months of 2013 and the first months of 2014 the price of energy remained at a stable level, which was the result of the balancing of two factors, i.e. the falling prices of crude oil on one hand and the rising prices of natural gas on the other hand, the latter occurring primarily due to harsh winter in the United States. However – as has already been mentioned – the prices of crude oil continue to remain at a high level, which is a consequence, inter alia, of the increasing demand pressure in OPEC countries resulting from the instability in countries such as Libya, Syria and Yemen as well as due to the sanctions imposed on Iran. Throughout the entire year 2013, the average prices of metals have decreased by 4.3% following a 16.8% decline in 2012; this has been a consequence of the diminished growth in terms of global demand for metals (a phenomenon which also encompassed the Chinese economy), coupled with the dynamic increase in the supply thereof. Analysts believe that prices of metals should be expected to drop even further in the nearest future; throughout the entire year 2014 the annual average prices of metals may fall by as much as 5.4%. Food prices increased by 1.1% in 2013, following the 2.4% decline experienced in 2012. The prices of agricultural raw materials have also increased, rising by 1.5%; however, in the previous year these prices declined sharply (down by 12.7%). In terms of the global prices of beverages (including coffee, tea and cocoa), on the other hand, year 2013 brought about the further decline thereof (down by 11.9%, following a 18.6% decrease the year before). The prospects for most types of crops cultivated worldwide are encouraging. It is estimated that the global production of key cereals and oilseed crops will surpass demand. Furthermore, favourable weather conditions will translate into a high supply of wheat, corn and rice in China. At the same time, the reserves of agricultural products, including, in particular, corn, are expected to become replenished. The only exception is the unfavourable weather conditions experienced in South America at the beginning of 2014, which may result in some pricing pressure; however, according to IMF estimates, the


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annual average food prices in 2014 will fall by 5.3%, while the prices of agricultural raw materials will increase by a mere 0.5%. With respect to the prices of beverages, analysts expect them to rise by 15.1%, following two years of sharp price declines. In 2013 the exchange rate for the US dollar has weakened against many key international currencies. The upward trend of the US dollar against the Euro (yoy) originating in Q4 2011 was reversed in Q1 2013 (when the US dollar fell by 0.7%); this tendency persisted throughout the entire year 2013. As a result, the annual average exchange rate for the US dollar in 2013 was lower by 3.2% in relation to the Euro, whereas in 2012 it was higher by over 8%. From the third quarter of 2013 onwards, the American currency has also begun to weaken against the Swiss franc (down by 3.2% in Q3 and by 3% in Q4). This has translated to a depreciation of the US dollar by 1.2% on the annual scale, compared to a 5.7% appreciation in the previous year. The US dollar has also lost ground against two important Asian currencies in 2013, i.e. the Chinese yuan and the South Korean won. The downward trend of the US dollar against the yuan (yoy) has persisted for a number of years now, although it began to ebb in 2013. Whereas in 2011 and 2012 the US dollar was weaker by 4.5% and 2.4% respectively in relation to the yuan, in 2013 this figure has decreased to 1.8%. As regards the South Korean won, the exchange rate for the US dollar was lower by 2.8% in 2013, compared to the 1.7% appreciation thereof recorded in the previous year. The above trend may be contrasted with the dynamic appreciation of the US dollar against the Japanese yen. This trend has begun in Q3 2012 and has persisted throughout the entire year 2013. As a result, the annual average exchange rate for the US dollar amounted to about 97.55 JPY – 22.3% higher than in the previous year. The American currency has also gained substantially against the Brazilian real (up by 10.4%), even though its appreciation was lower than in 2012 (16.8%). The appreciation of the US dollar against the Russian rouble and the British pound was negligible, at 2.7% and 1.4% respectively. It needs to be emphasized that the American currency was gaining in strength against the rouble with each quarter of 2013 (rising by 0.8% in Q1 compared to a 4.8% appreciation in the fourth quarter). In the first quarter of 2014 the exchange rate for the US dollar in relation to the Russian currency has already managed to rise by as much as 15.2%.

1.1.3 Situation in global trade

1.1.3.1 Volume of trade in goods in 2013

The slowdown in the global GDP growth, from 3.5% in 2012 to 3.2% in 2013, did not have a negative impact on global trade growth. According to IMF data, the volume of world trade in goods and services increased in 2013 by 3.1%, while in the previous year it amounted to 2.8% Much like in the previous years, in 2013 the trade growth proved to be much slower in developed countries. The exports from this group of markets has increased by 2.3% (compared to a 2.1% increase in 2012), while the volume of exports from developing markets went up by 4.4%, making the growth of exports from this group of markets 0.2 p.p. faster than in the previous year. An even greater difference in terms of growth rate was experienced in terms of imports – the volume of imports in developed countries increased by 1.4%, whereas in developing countries it surged by 5.7%, i.e. four times faster.

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Table 3 Changes in global goods and services trade in 2012-2015

changes of volume

2012 2013 2014* 2015*

World 2.8 3.1 4.0 5.3

Exports

Advanced economies 2.1 2.3 4.2 4.8

Emerging and developing economies 4.2 4.4 5.0 6.2

Imports

Advanced economies 1.1 1.4 3.5 4.6

Emerging and developing economies 5.7 5.7 4.7 6.4

* forecast Source: Strategy and Analyses Department of the Ministry of Economy on the basis of IMF data from April and July 2014.

On the other hand, according to the data provided by the World Trade Organization, the global commodities trade volume increased by 2.1%, rising by 2.4% in terms of exports and by 1.8% in terms of imports. Analysts emphasize that the increase in global exchange in the last two years (up by 2.3% in 2012) remained significantly below the average value for the last 20 years (i.e. 5.3%). Meanwhile, according to WTO estimates, the global GDP growth (at market exchange rates) slowed down from 2.3% in 2012 to 2.2% in 2013; in developed countries the GDP growth during that period went down from 1.3% to 1.1%, while in developing countries it decreased from 4.5% to 4.4%. Table 4 Changes in GDP and in global volume of trade in goods in the years 2011-2013

GDP Exports Imports

2011 2012 2013 2011 2012 2013 2011 2012 2013

World 2.8 2.3 2.2 5.5 2.4 2.4 5.3 2.1 1.8

North America 2.0 2.8 1.8 6.5 4.5 2.8 4.4 3.1 1.2

United States 1.8 2.8 1.9 7.1 4.0 2.6 3.8 2.8 0.9

South and Central America 4.5 2.7 3.0 6.8 0.8 0.7 13.1 2.2 2.5

Europe 1.9 -0.1 0.3 5.7 0.8 1.5 3.2 -1.8 -0.5

European Union 1.7 -0.3 0.1 5.8 0.5 1.7 2.8 -1.9 -0.8

Commonwealth of Independent States

4.9 3.5 2.0 1.6 1.0 0.7 17.2 6.9 -1.1

Africa 1.1 5.7 3.8 -8.4 6.5 -3.4 5.1 12.7 4.0

Middle East 5.7 3.4 3.0 7.8 5.3 1.5 4.5 11.1 4.4

Asia 4.1 4.0 4.2 6.4 2.7 4.6 6.7 3.6 4.4

China 7.7 7.7 7.5 8.8 6.2 7.7 8.8 3.6 9.9

Japan 1.4 1.6 1.5 -0.6 -1.0 -1.8 4.3 3.8 0.6

India 3.2 4.4 5.4 15.0 0.2 7.0 9.7 6.8 -3.0

Newly industrialized economics* 4.1 1.8 2.7 7.8 1.4 3.4 2.7 1.4 3.4

* Hong Kong, South Korea, Singapore and Taiwan Source: Strategy and Analyses Department of the Ministry of Economy on the basis of WTO data from April 2014.

Year 2013 brought about an 1.5% increase in the volume of the export of goods in developed countries; although this figure constitutes an improvement over 2012 (where it only increased by 1.1%), the goods export growth continues to remain more than two times lower than in developing countries, where it attained the value of 3.3%. Favourable changes were recorded in Europe, where the export growth increased from 0.8% in 2012 to 1.5% in 2013; in the United States export growth experienced a slowdown, decreasing from 4% to 2.6%, while in Japan it has continued to decline (down to 1% compared to 1.8% in 2012). Imports to developed countries fell slightly in 2013 (down by 0.2%) from the stagnant levels recorded in 2012. In this group of markets, significant import slowdown was recorded in Japan (down from 3.8% to


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0.6%) and the USA (down from 2.8% to 0.9%); in Europe the rate of decline in imports has ebbed, falling to 0.5% compared to 1.8% in 2012. The pace of trade growth in developing countries decreased to a level of 3.3% in exports (from 3.8% in 2012) and to a level of 4.4% in imports (from 5.1% in 2012). A significant contributing factor has been the deterioration of the trading situation in Africa, where the export volume decreased by 3.4% (compared to a 6.5% increase in the previous year), while the growth of import volume slowed down from 12.7% to 4%. The Middle East has also experienced a slowdown, with the export volume rising by 1.5% (compared to 5.3% in 2012) and the import volume increasing by 4.4% (compared to 11.1% in 2012). On the other hand, trade volumes in Asia have increased, with export volumes rising by 4.6% (compared to 2.7% in 2012) and import volumes increasing by 4.4% (compared to 3.6% in 2012). The volume of Chinese exports increased by 7.7% (compared to 6.2% in the previous year) while, the volume of exports from India went up by 7% (compared to 0.2% in 2012). The volume of imports in China has also increased significantly, rising from 3.6% to 9.9%, whereas in India the import volume fell by 3% compared to the 6.8% increase seen in 2012. The export volume growth rate of the Commonwealth of Independent States slowed down slightly (down from 1% to 0.7%), while the decline in imports amounted to 1.1% (compared to a 6.9% increase seen in the previous year). Chart 1 Changes in the volume of trade in goods in selected countries and groups of countries in the years 2011-2013 Changes in the volume of exports

0

2

4

6

8

2011 2012 2013

% World

EU

CIS

North America

Asia

Changes in the volume of imports

-5

0

5

10

15

20

2011 2012 2013

% World

EU

CIS

North America

Asia

Changes in the volume of exports

-5

0

5

10

15

20

2011 2012 2013

% World

USA

Japan

China

India

Changes in the volume of imports

-4

-2

0

2

4

6

8

10

2011 2012 2013

%

World

USA

Japan

China

India

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of WTO data from April 2014.

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1.1.3.2 Global trade in goods at current US dollar prices

The value of global exports of goods expressed in US dollars reached the level of USD 18.8 trillion and turned out to be 2% higher than in 2012. The growth in global exports in terms of value was slightly slower than in terms of volume, resulting from a slight decline in traded goods prices. Taking into account the individual regions of the world, Europe and Asia continue to account for the most significant part of the trading volume. The contribution of European and Asian markets to both the global import and export in 2013 amounted to 36% and 32% respectively. Table 5 Changes in merchandise trade by region and selected economies in the years 2005-2013 (in USD terms)

Exports Imports

2013 2005-2013

2011 2012 2013 2013 2005-2013

2011 2012 2013

USD bn

in % USD bn

in %

World 18,270 8 20 0 2 18,395 7 19 0 1

North America 2,417 6 16 4 2 3,198 4 15 3 0

United States 1,579 7 16 4 2 2,331 4 15 3 0

Canada 458 3 16 1 1 474 5 15 2 0

Mexico 380 7 17 6 3 391 7 16 5 3

South and Central America

737 9 28 -1 -2 773 12 26 3 2

Brazil 242 9 27 -5 0 250 16 24 -2 7

Other 495 9 29 1 -3 522 11 27 5 0

Europe 6,636 5 18 -4 4 6,595 5 17 -6 1

European Union 6,068 5 18 -5 4 6,000 4 17 -6 1

Germany 1,453 5 17 -5 3 1,187 5 19 -7 2

Netherlands 664 6 16 -2 1 590 6 16 -1 0

France 580 3 14 -5 2 681 4 18 -6 1

United Kingdom 541 4 22 -7 15 654 3 15 2 -5

Italy 518 4 17 -4 3 477 3 15 -13 -2

CIS 778 11 33 2 -3 575 13 30 6 1

Russia 523 10 30 1 -1 344 13 30 4 3

Africa 599 9 16 5 -6 628 12 18 9 2

South Africa 96 8 19 -8 -4 126 9 28 2 -1

Other 503 9 16 8 -7 501 13 16 10 3

Oil exporters* 327 8 14 12 -11 199 14 11 10 9

Other 176 10 20 1 2 302 12 18 10 -1

Middle East 1,332 12 40 7 -1 770 11 17 9 4

Asia** 5,769 10 18 2 2 5,855 10 23 4 1

China 2,210 14 20 8 8 1,950 15 25 4 7

Japan 715 2 7 -3 -10 833 6 23 4 -6

India 312 15 34 -2 5 466 16 33 5 -5

Newly industrialized Asian economies***

1,295 7 16 -1 1 1,300 8 19 0 0

* Algeria, Angola, Cameroon, Chad, Congo, Equatorial Guinea, Gabon, Libya, Nigeria, Sudan; ** Asia includes also Australia and Oceania; *** Hong Kong, South Korea, Singapore and Taiwan; Source: Strategy and Analyses Department of the Ministry of Economy on the basis of WTO data from April 2014.

The value of European export of goods increased by 4% to the level of USD 6.64 trillion, while import increased by 1%, reaching the level of USD 6.6 trillion. EU exports have increased at an identical rate, attaining the value of USD 6.07 trillion; the export growth rate of the German economy – the biggest economy in the region – was slightly lower, rising by 3% and attaining the value of USD 1.45 trillion. The export volumes in other key EU economies increased at a similar or slightly slower pace – in Italy it


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increased by 3% (attaining the value of USD 518 billion), in France – by 2% (attaining the value of USD 580 billion), in the Netherlands – by 1% (attaining the value of USD 664 billion). Against this background, the United Kingdom attained excellent results, with a 15% surge in exports (up to USD 541 billion). Imports of the main EU economies increased at a slower pace than exports; imports into the EU as a whole rose by 1% (reaching the level of USD 6 trillion), with imports to Germany increasing by 2% (attaining the value of almost USD 1.2 trillion), imports to France rising by 1% (attaining the value of USD 681 billion) and imports to the Netherlands remaining unchanged (EUR 590 million). On the other hand, the import volumes for the United Kingdom and Italy have decreased, falling by 5% and 2% respectively (down to USD 654 billion and USD 477 billion). In Asia – the world’s second-largest contributor to the volume of trade in goods – exports increased two times slower than in Europe, i.e. by 2%, attaining the value of USD 5.77 trillion. Import volumes, meanwhile, amounted to USD 5.86 trillion, i.e. 1% higher than in the previous year. The relatively moderate growth of exports in this part of the world has been, to a large extent, the result of the decline in Japanese exports (down by 10% to a level of USD 715 billion) as well as of the fact that the exports in newly industrialized Asian economies grew by a mere 1% (attaining the level of nearly USD 1.3 trillion). Against this background, Chinese exports have experienced a dynamic growth (up by 8% to USD 2.2 trillion); the same applied to export volumes of India (up by 5% to USD 312 billion). In 2013, the Chinese economy has also seen a relatively rapid import growth (up by 7% to approximately USD 1.95 trillion), which contrasted with the decline in imports in other main economies of the region in question, i.e. Japan (down by 6% to USD 833 billion) and India (down by 5% to USD 466 billion). The third most significant region in terms of the contribution to global trade is North America, accounting for 13% of exports and 17% of imports in 2013. The exports from this region have exceeded USD 2.4 trillion, i.e. 2% higher than in the previous year, while imports attained the value of USD 3.2 trillion, which was similar to the figures attained for 2012. The figures recorded for the United States were identical to those of the entire region, i.e. a 2% increase in exports (up to USD 1.58 trillion) and a stable level of imports (USD 2.33 trillion – virtually unchanged compared to the previous year). During the period in question, Canadian exports rose by 1% (attaining the value of USD 458 billion), while imports remained unchanged compared to the previous year (USD 474 billion). The trade volume of Mexico, on the other hand, increased at a faster pace, rising by 3% both in terms of exports (attaining the level of USD 380 billion) and imports (USD 391 billion).

Chart 2 Changes in trade in selected groups and countries in the years 2011-2013 (in USD terms) Changes in exports per continent

-10

-5

0

5

10

15

20

25

2011 2012 2013

% WorldNorth AmericaEuropeAsiaAfrica

Changes in imports per continent

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2011 2012 2013

% WorldNorth AmericaEuropeAsiaAfrica

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Changes in exports in the EU

-10

-5

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2011 2012 2013

% World

EU

Germany

France

United Kingdom

Changes in imports in the EU

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2011 2012 2013

% World

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Germany

France

United Kingdom

Changes in exports in the CIS

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35

2011 2012 2013

%World

CIS

Russia

Changes in imports in the CIS

0

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30

2011 2012 2013

%World

CIS

Russia

Changes in exports in North America

0

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%World

North America

USA

Canada

Changes in imports in North America

0

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2011 2012 2013

% World

North America

USA

Canada

Changes in exports in Asia

-15

-5

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35

2011 2012 2013

%World

Asia

China

Japan

India

Changes in imports in Asia

-10

0

10

20

30

2011 2012 2013

%World

Asia

China

Japan

India

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of WTO data from April 2014.


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The value of exports from South and Central America in 2013 amounted to USD 737 billion, decreasing by 2% compared to the results for the previous year, while imports rose by 2% to USD 773 billion. The goods exports of the biggest economy in the region – Brazil – attained the value of USD 242 billion, changing very little compared to 2012. Brazilian imports, on the other hand, rose by 7%, attaining the value of USD 250 billion. The contribution of South and Central America to both streams of the global trade in goods amounted to 4% in terms of both exports and imports. Table 6 World's leading exporters and importers of goods in 2013

Value Share Annual change

Value Share Annual change Exporters

USD bn in %

Importers

USD bn in %

1 China 2,210 11.8 8 1 United States 2,331 12.4 0

2 United States 1,579 8.4 2 2 China 1,950 10.3 7

3 Germany 1,453 7.7 3 3 Germany 1,187 6.3 2

4 Japan 715 3.8 -10 4 Japan 833 4.4 -6

5 Netherlands 664 3.5 1 5 France 681 3.6 1

6 France 580 3.1 2 6 United Kingdom 654 3.5 -5

7 Republic of Korea 560 3.0 2 7 Hong Kong 622 3.3 12

8 United Kingdom 541 2.9 15 8 Netherlands 590 3.1 0

9 Hong Kong 536 2.9 9 9 Republic of Korea 516 2.7 -1

10 Russia 523 2.8 -1 10 Italy 477 2.5 -2

11 Italy 518 2.8 3 11 Canada 474 2.5 0

12 Belgium 469 2.5 5 12 India 466 2.5 -5

13 Canada 458 2.4 1 13 Belgium 450 2.4 3

14 Singapore 410 2.2 0 14 Mexico 391 2.1 3

15 Mexico 380 2.0 3 15 Singapore 373 2.0 -2

16 Saudi Arabia 376 2.0 -3 16 Russia 344 1.8 3

17 United Arab Emirates

365 1.9 4 17 Spain 339 1.8 0

18 Spain 316 1.7 7 18 Taipei 270 1.4 0

19 India 312 1.7 5 19 Turkey 252 1.3 6

20 Taipei 305 1.6 1 20 Thailand 251 1.3 0

21 Australia 253 1.3 -1 21 Brazil 250 1.3 7

22 Brazil 242 1.3 0 22 United Arab Emirates

245 1.3 7

23 Switzerland 229 1.2 1 23 Australia 242 1.3 -7

24 Thailand 229 1.2 0 24 Malaysia 206 1.1 5

25 Malaysia 228 1.2 0 25 Poland 204 1.1 2

26 Poland 202 1.1 9 26 Switzerland 200 1.1 1

27 Indonesia 184 1.0 -3 27 Indonesia 187 1.0 -2

28 Austria 174 0.9 5 28 Austria 182 1.0 2

29 Sweden 167 0.9 -3 29 Saudi Arabia 164 0.9 5

30 Czech Republic 161 0.9 3 30 Sweden 158 0.8 -3

Total of above 15,339 81.7 Total of above 15,492 82.1

World* 18,784 100.0 2 World* 18,874 100.0 1

* the data include the value of re-exports and imports for re-exports; Source: Strategy and Analyses Department of the Ministry of Economy on the basis of WTO data from April 2014.

The Commonwealth of Independent States also experienced a decline in exports in 2013; during that year, this region accounted for 4% of global exports and 3% of global imports. The total value of exports from the CIS amounted to USD 778 billion – a 3% decrease compared to the previous year. Imports, on the other hand, grew by 1%, attaining the level of USD 575 billion. The export decline experienced by the Russian economy – the dominant economy in the region – was less noticeable; Russian exports fell by 1% (down to USD 523 billion), while imports increased by 3% (attaining the value of USD 344 billion).

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Whereas in 2012 Africa experienced the biggest export surge among all regions (up by 5%), 2013 brought about the sharpest export decline (down by 6% to USD 599 billion). The export surge experienced in 2012 resulted primarily from the rapid increase in export volumes among the regional crude oil exporters (i.e. Algeria, Angola, Cameroon, Chad, Congo, Equatorial Guinea, Gabon, Libya, Nigeria and Sudan), which recorded a 12% increase; in 2013, it was precisely this group of countries which has dragged down the figures for the entire region as their exports fell by 11% (down to USD 327 billion). African imports, on the other hand, rose by 2% (up to USD 628 billion); the group of crude oil exporting countries referred to above recorded the most significant increase in imports (up by 9% to USD 199 billion). The Middle East accounted for 7% of the global export of goods and 4% of the global import of goods in 2013; the value of exports in this region amounted to USD 1.33 trillion, 1% lower compared to the previous year, while imports rose by 4%, attaining the value of USD 770 billion. The world's largest exporter of goods in 2012 was China, which occupies this position for the fifth year in a row, systematically reinforcing its position as leader. The share of this market in global exports amounted to 11.8% compared to 11.2% recorded for 2012 and 10.4% recorded for 2011. The subsequent positions, as far as global export of goods is concerned, have been taken – as was the case in the previous year – by the United States and Germany, with a share of 8.4% and 7.7% respectively, maintaining their respective positions from the previous year. On the other hand, due to the aforementioned 10% decline in exports, the contribution of Japan to global exports fell from 4.4% to 3.8%; in spite of this, Japan has managed to remain the fourth largest global exporter of goods. The United Kingdom has made notable progress due to its 15% export surge, climbing to the eighth spot (with a 2.9% share in global exports) compared to the situation in the previous year, when it occupied the eleventh position (2.6% share). As far as the 2013 list of the world's leading importers of goods is concerned, it includes – as has been the case in the previous years – the United States (12.4%), China (10.3%) and Germany (6.3%). Poland has managed to move up by one spot on the list of global exporters of goods, attaining the 26th position with a 1.1% share (USD 202 billion). A similar situation occurred with respect to imports – our country took the 25th spot, attaining a 1.1% share in global imports (USD 204 billion). The value of global exports of services increased in 2013 by 6%, reaching the level of USD 4.6 trillion. Services account for nearly 20% of total global trade in goods and services. In terms of types of services involved, the export of tourism services experienced the most dynamic increase, rising by 7% to a level of nearly USD 1.2 trillion and accounting for more than one fourth of the entire global services export volume. The transport services export growth, on the other hand, proved to be much slower, rising by a mere 2% to a level of USD 900 billion; transport services account for nearly 20% of the entire global services exports. The so-called miscellaneous commercial services group accounted for approximately 55% of the global services export volume; the export of the services in question increased by 6% to a level of USD 2.55 trillion, even though the growth rate varied to a certain extent for the individual types of services covered by this broad category. The value of exports of computer and information services, insurance services and construction services recorded the most substantial increase, rising by 8%, 8% and 7% respectively and reaching the value of USD 285 billion, USD 115 billion and USD 330 billion respectively. In contrast, the most considerable decline was recorded in the case of telecommunication services (down by 2% to


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a level of USD 115 billion). The export of construction services fell by 3%, attaining the value of USD 105 billion. Europe accounted for nearly a half of the entire global services export volume (47%), with the volume of such exports increasing by 6% to a level of USD 2.17 trillion. At the same time, this region also accounted for 41% of the services import volume, experiencing a 5% increase in imports (up to USD 1.78 trillion). The export of services in the European Union rose by 6% (up to USD 1.98 trillion), while import increased by 4% (up to USD 1.65 trillion). The best results among the main European economies were recorded in Germany (USD 287 billion), France (USD 233 billion) and the Netherlands (USD 142 billion); the export of services from each of those countries increased by 8%. The United Kingdom, on the other hand, recorded the poorest results as exports grew by a mere 1% (attaining the value of USD 290 billion). In terms of import of services, France and Germany have led the way with an 8% and 7% increase in import volumes respectively (up to USD 188 billion in case of France and USD 315 billion in case of Germany). The share of Asian countries in the services trade amounted to 26% in terms of exports and 28% in terms of imports. The value of Asian export of services increased by 6%, attaining the level of USD 1.21 trillion, while the value of imports rose by 4%, attaining the level of USD 1.23 trillion. The services trade volume of China increased in the most dynamic fashion, rising by 9% in terms of exports (attaining the level of USD 207 billion) and by 17% in terms of imports (USD 329 billion). Japan, on the other hand, posted poor results in terms of both the export and import of services – export rose by a mere 1% (attaining the value of USD 144 billion), while imports plummeted by 8% (down to USD 161 billion). North America accounted for 16% of the global export and 13% of the global import of services in 2013. The export of services in this region increased by 5% (attaining the level of USD 761 billion), while imports rose by 2% (attaining the level of USD 561 billion). In case of the biggest economy in the region – the United States – exports increased by 5% compared to the previous year (USD 662 billion), while imports rose by 3% compared to the previous year (USD 427 billion). The United States remains the leader of the global services trade – both in terms of exports (with a share amounting to 14.3%) and imports (9.8%). As has been the case in the previous years, the second and third positions in terms of the export of services were taken by the United Kingdom (6.3%) and Germany (6.2%). As far as the import of services is concerned, however, there has been a change with respect to the second and third positions – as a result of the 17% surge in imports, China has made its way up to the second spot (with a 7.6% share), overtaking Germany (7.2%). In 2013, Poland took the 28th spot (up by two positions compared to the previous year) on the list of the world’s exporters of services, which resulted from a 6% increase in the export of services (up to USD 40 billion, giving our country a 0.9% share in the global export of services). In terms of import, on the other hand, Poland took the 32nd position – the same as last year – with a share amounting to 0.8%, i.e. USD 34 billion.

1.1.4 Current situation and development prospects for the global economy and selected markets

The year 2013 brought about a slight global GDP growth slowdown (2.8%, compared to 3% in 2012), resulting from the weak economic situation on a large number of markets in the first half of the year. In the second half of 2013, however, the global economy was on the rebound, which is confirmed by the figures for the first months of 2014. Following a number of years of a profound economic crisis, the situation in developed countries has recently seen a systematic improvement, including, first and

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foremost, the revival in the field of investments and trade as well as signs of labour market recovery which continue to appear despite the fact that unemployment levels remain high. At the same time, the main developing markets have experienced something of a slowdown in terms of growth. Despite the clearly apparent weaknesses of the current economic revival as well as the relatively high level of uncertainty which continues to persist, analysts expect the economic growth to accelerate at a modest pace. With respect to the year 2014, OECD estimates the global GDP growth to reach the level of 3.4%, increasing to 3.9% in 2015. The economic recovery in OECD countries, supported, inter alia, through fiscal consolidation reductions, is expected to be more dynamic in the United States than in Japan and the Eurozone. At the same time, the situation on the labour market is expected to improve in many economies, even though unemployment rates are expected to fall marginally; in OECD countries, unemployment rate is likely to decrease from 7.9% – a level at which it has remained in years 2011-2013 – to 7.5% in 2014 and 7.2% in 2015. Table 7 Changes in GDP in the world and in selected markets and changes in the global goods and services trade in the years 2011-2015

2011 2012 2013 2014* 2015*

GDP

World 3.7 3.0 2.8 3.4 3.9 OECD countries 2.0 1.5 1.3 2.2 2.8 Non-OECD countries 6.4 5.2 5.0 4.9 5.3 United States 1.8 2.8 1.9 2.6 3.5 Euro Area 1.6 -0.6 -0.4 1.2 1.7 Japan -0.5 1.4 1.5 1.2 1.2 China 9.3 7.7 7.7 7.4 7.3

World real trade growth 6.5 3.2 3.0 4.4 6.1

* forecast Source: Strategy and Analyses Department of the Ministry of Economy on the basis of OECD data from May 2014.

Whereas the global trade growth decreased to a level of 3% (compared to 3.2% in 2012), in the next two years it is expected to rise by 4.4% and 6.1% respectively, significantly exceeding the growth of the global GDP. Despite the fact that the position of the United States with respect to the Polish trade volume continues to remain disproportionally low compared to many other countries with a markedly lower economic potential, due to the leading role of this country in the global economy, both in terms of scale and the level of innovation, the United States continues to have a decisive influence on the global economic situation, including, in particular, the situation on the EU and Eurozone markets which are inextricably linked to the economy of our country. In the first half of 2013, the economic growth in the United States was impeded by increased fiscal consolidation and serious restrictions imposed on federal budget expenditure. As a consequence, the GDP growth during that period only slightly exceeded the level of 1.2%, which was significantly slower than in the second half of the previous year, including, in particular, the fourth quarter thereof. Internal demand constituted a significant factor which contributed to GDP growth, rising by 1.7%. However, the growth in private consumption was weak throughout the most part of the year, which was, to a significant extent, due to an increase in tax and wage burdens. This resulted in an incomplete utilization of production capacities. As a result, the American GDP increased by a mere 1.9% throughout the entire year 2013, compared to 2.8% in 2012. Macroeconomic indicators recorded in the second half of 2013 confirm the views of analysts who believe that the American economy – despite a plethora of problems – has embarked upon a path


23

towards recovery, boosted by residential housing market recovery and an increase in household incomes which occurred despite the increased restrictions in terms of financing conditions which impeded the intensification of activities in this sector. OECD analysts expect the U.S. economic growth to increase to a level of 2.6% in 2014 and 3.5% in 2015. The unemployment rates in the United States have been systematically dropping from the record level of 10% in 2009 to 7.4% in August 2013, even though the reduction in the number of unemployed persons interested in continuing their search for jobs, including those who ceased their efforts due to advancing age, made a significant contribution towards this improvement. The situation on the labour market is expected to improve, with the unemployment rate dropping to 6.5% in 2014. Inflation is expected to reach the level of approximately 1.5%. In 2013, Japan has made strong efforts to overcome the recession which hit its economy in the previous year as a result of the overall growth slowdown experienced by the global economy as well as of the tensions in the Chinese economy. Events took a favourable turn with the announcement by the government of the so-called three-pronged strategy aimed at forcing Japan out of the crisis, providing support to the household sector and businesses alike and increasing their trust towards the state. In order to achieve this goal, the government applied instruments and stimuli of a fiscal and monetary nature. The fiscal package implemented in 2013 as well as new monetary policy framework oriented towards achieving the inflation target at the level of 2%, supported by the weakening of JPY, resulted in a clear economic recovery and restored the trust of consumers and the business environment. GDP growth, supported by recovery in global trade, amounted to 1.5% in 2013. In a situation where the public debt in 2012 amounted to approximately 220% of the GDP, a detailed and simultaneously reliable financial consolidation plan oriented towards achieving a budgetary surplus by 2020 was considered as the document of key importance to maintain confidence with respect to Japanese finances. It was decided that the tax on consumption should be raised to the level of 10% by 2015. The Bank of Japan was obligated to carry out a “quantitative and qualitative easing” until the designated inflation target (2%) is achieved and maintained in a manner ensuring a definitive emergence from deflation. The strategy of economic growth announced in the middle of 2013 contains mainly reform-oriented efforts aimed at stimulating economic growth. Despite the fact that the economic expansion of the country was cooled down somewhat by the export slowdown, it is expected that the improvement of the situation on the labour market and increasing the confidence of entrepreneurs will partially mitigate the effects of tightening the fiscal policy which is planned for 2014-2015 in the form of raising the tax on consumption. Nevertheless, the further increase of fiscal consolidation will hamper GDP growth, which is expected to amount to a mere 1.2% in the years 2014-2015. At the same time, inflation is expected to rise, reaching the level of 2.6% in 2014. In 2013, including, in particular, the first half of the year, the economic activity in most countries of the Eurozone was decreasing as a result of the advancing fiscal consolidation, weak consumer and business confidence as well as strict credit policy, especially in peripheral economies of the zone. A slow recovery was observed only in the second half of the year due to a decline in the fiscal consolidation rate as well as increased private demand resulting from the improvement of consumer and business attitudes as well as the curbing of the processes of financial market fragmentation and disintegration. At the same time, high unemployment and surplus of production capacities have contributed to the reduction of the inflation pressure. The final quarter of 2013 brought about an increase in the GDP which has subsequently picked up the pace markedly in Q1 2014. The economic activity in the Eurozone and the entire European Union is expected to improve, translating, in turn, into

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an increasingly rapid pace of economic growth. For the entire year 2014, OECD analysts expect the economic growth in the Eurozone to reach the level of 1.2%, compared to the 0.4% decline experienced in 2013. The process of fiscal consolidation has continued in accordance with the plan due to high levels of indebtedness, but at the same time automatic, full utilization of the appropriate financial stabilizers was introduced. The basic problem of most economies in the Eurozone concerns the effective utilization of all the available system-wide growth stabilizers in the area of fiscal and monetary policies in order to avoid the risk of the transformation of low inflation into deflation. The economic situation on the German market, the most important market for Poland, has improved gradually in 2013. After a period of progressive slowdown throughout the entire year 2012, year 2013 brought about a slow but systematic increase in optimism, both among households and private entrepreneurs, which facilitated the achievement of economic growth at the level of 0.5% in 2013, which could indicate that the German market is overcoming the crisis and embarking upon the path of growth at a level of approximately 2% in 2014. In the beginning of 2013, the German economy grew at a moderate pace. Exports to both European and non-European markets was regarded as underwhelming, while activity in the construction sector has dwindled due to unfavourable weather conditions during winter months. Despite the low interest rates, the credit stream for non-finance sector enterprises and households remained at a moderate level. Uncertainty as to the effective overcoming of crisis in the Eurozone that continued in the first half of the year was hampering investment decisions and purchases of durable consumer goods. However, an increase in employment was taking place at the same time, supporting private consumption. The improvement of business environment confidence in the last months of 2013, especially in the construction and processing industries, indicates the strengthening of growth trends in the German economy. While the severely suppressed economic activity in the Eurozone has hampered the recovery of the German economy, the growth in global trade facilitated the expansion of German exports. At the present stage, both of these factors – the economic revival in the Eurozone and the increase of the global trade exchange – may be expected to act as stimulants for the German economy. An increase in wages and employment as well as low interest rates had a positive influence on domestic demand, helping maintain a surplus on the current account at a level similar as in the previous year. The unemployment rate was still subject to a slow downward trend (from 5.5% in 2012 to 5.3% in 2013), while the consumer price index amounted to 1.6%. In 2014, unemployment rate should continue to decrease, reaching the level of 5%, while the inflation rate is expected to dwindle to 1.1%. For the past four years United Kingdom has been the second largest export market of Poland after Germany, which justifies the increased interest in the development of the economic situation in this country. The weak condition of trade partners from the Eurozone which has persisted since the beginning of 2013, the meagre growth of actual incomes and the need to restrict the scale of financial leveraging in the private sector severely hampered economic growth. Despite the recovery on the labour market, private consumption was suppressed by the low level of actual average wages, fragile level of confidence and restrictions in household financing. Private investments were restricted by weak demand and high uncertainty. Having regard to the meagre production growth, it can be stated that the situation in the employment market was developing in a favourable manner and reflected the flexibility of the labour market and the low increase in wages. The growing use of part-time employment and self-employment allowed to limit the scale of redundancies


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and unemployment benefits. Budget consolidation measures aimed at limiting the budget deficit in 2014 to the level of 2.3% continued to be applied. In the second half of the year, the economic growth rate has picked up noticeably, experiencing such dynamic acceleration that the actual economic growth on the annual scale amounted to 1.7%, which was substantially higher than in the previous year (0.3%). This result has been facilitated by adjustment measures in the area of monetary policy and the continuation of beneficial changes on the labour market which translated into an increase in household consumption. The promising prospects for further increase of household consumption facilitated a substantial recovery in terms of investments. Base inflation dropped below 2%, i.e. below the inflation target, while the unemployment rate decreased to 7.6% compared to 7.9% in the previous year. The year 2014 is expected to bring about a further significant increase in economic activity in the United Kingdom, contributing towards a 3.2% GDP growth, facilitated not only by private consumption levels, but also by a substantial surge in investments. This is expected to translate to a further decrease in unemployment rate, which should drop to a level of 6.9%. Inflation, on the other hand, is expected to reach the level of 2%. In 2013 the developing and emerging economies experienced something of a growth slowdown. Among the main emerging markets (except for Russia, referred to at a later stage in the present document), the leading position with respect to the Polish trade turnover is held by China. Following the signs of recovery recorded in the Chinese economy at the end of 2012, it has experienced an unexpected slowdown in the first quarter of 2013. The source thereof has been the reduced internal demand resulting from a severe decrease in investment capital as compared to the level from 2012. Investments in fixed assets have decreased at a relatively slower rate, since the investment slowdown in the industry and services sectors was compensated by increased spending on housing and infrastructure. While the increased credit supply and more favourable fiscal policy have resulted in an economic growth recovery in the middle of 2013, the GDP growth rate remained below the average values from previous years for the second consecutive year, reaching the level of 7.3%. The return to the path of rapid growth, at the level of more than 8%, was hampered by a slowdown in exports due to decreased import demand on the global markets. Consumption in the government sector was inhibited as part of the campaign designed to limit excessive spending. The reduction of export activity resulted in another decrease in the surplus on the current account to the level of 2% of the GDP, i.e. to a level similar to that recorded for 2011. Low inflation, which coincided with economic growth slowdown, proved conducive to the relaxation of the monetary policy, coupled with the continuous application of the existing measures necessary to maintain financial stability and the introduction of new ones. The fiscal policy applied by the authorities is – to a large extent – designed to incentivize development, supporting sustainable, pro-social growth while at the same time providing for the implementation of structural reforms. It is stated that there is a need to define a detailed schedule for the implementation thereof, especially in the area of deregulating interest rates, increasing labour market flexibility by limiting barriers to internal migration as well as increasing the supply of development land. Having regard to the above, experts believe that during the next couple of years the growth of the Chinese economy will decrease slightly, attaining the value of 7.4% in 2014 and 7.3% in 2015. In 2012, the economic growth in India amounted to 4.9% and constituted the lowest result recorded in last 10 years. Initially, a gradual economic growth revival was expected to take place in 2013; however, it has been emphasized that such a situation shall be dependent upon the approval and launch of large investment projects as well as the successful entry of partial deregulations in the area of foreign direct investments into force. Despite the underwhelming demand, the base inflation level has remained high

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for a number of years. Tightening the fiscal policy and a new road map for fiscal consolidation constituted an important objective of the economic policy in 2013 which allowed for a further relaxation of the monetary policy. Efforts undertaken towards improving the process of directing social transfers to households were regarded as positive; however, further progress (fiscal system reform, reducing high energy subsidies) is expected in this area. The existing substantial energy subsidies should be reduced. The tax system should also be reformed in order to ensure greater and more transparent budgetary revenues, thereby stimulating private investments and increasing the level of competitiveness. In particular, there is an urgent need to introduce the indirect tax reform, which is long overdue. The depreciation of the Indian rupee, performed in the summer of 2013, as well as the strengthening of external demand, had an impact on the recovery of the growth rate of export of goods and services from 5% in 2012 to 8.5%, coupled with a simultaneous decrease of the import volume growth rate from 6.6% to -0.8%, which did not, however, translate into an increase of the GDP growth rate which amounted to 4.4% and, despite optimistic expectations from the first half of 2013, turned out be lower than in the previous year. It is expected, however, that in 2014 the GDP growth will increase, reaching the same level as in 2012, i.e. 4.9%. Since the end of 2011, fiscal and monetary stimulators supported the progressing economic recovery, but the short-term macroeconomic indicators signalled a significant increase of uncertainty in the Brazilian economy. The unemployment rate remained at a low level. After a few years of balancing within tolerable limits, inflation exceeded 6% – a level significantly higher than the inflation target set at 4.5%. The inflow of portfolio capital has decreased, while macro-prudential programmes intended to ensure the effective management of these assets have been made less stringent. April 2013 marked an increase in interest rates; the further increase thereof appears necessary in order to restore the target inflation levels until the end of 2014. The acceleration of the economic growth rate in 2013 to the level of approximately 3%, contemplated at the beginning of the year, was dependent upon the improvement of infrastructure, limitation of tax barriers and further deepening of the private long-term financial market. There were also plans to verify the solutions oriented towards limiting competition from imports as they hamper medium-term growth in labour efficiency. In reality, despite strong support for national demand from the monetary and fiscal policy as well as due to a major credit injection, economic growth in 2013 amounted to 2.3% – significantly lower than the initial forecasts and below the economic potential. In 2014 the growth of the Brazilian economy is expected to slow down even further, reaching a level of a mere 1.8%. According to the estimates of the IMF, in 2013 the GDP of the CIS countries amounted to USD 2.79 trillion, of which the Russian Federation produced USD 2.12 trillion (75.9%), Kazakhstan – USD 220.3 billion (7.9%) and Ukraine – USD 176.2 billion (6.3%). These three countries account for over 90% of the economic potential of the CIS countries. With respect to the CIS countries, year 2013 was yet another year which brought about a relevant slowdown in economic growth. Average GDP growth rate for the entire group has declined to 2.1% from 3.4% in 2012 and 4.8% in 2011. The decline in economic growth concerned mainly the Russian Federation, which in 2013 recorded the lowest GDP growth since the crisis in 2009, that is 1.3% as compared to 3.4% in 2012 and 4.3% in 2011. The low level of economic activity was also characteristic of countries with strong links to the Russian Federation. In 2013, Ukraine recorded a zero GDP growth rate following a 0.2% growth in 2012 and a much higher level of growth (5.2%) in 2011. A similar rate of economic growth slowdown was seen in Belarus, which recorded a GDP growth at the level of 0.9% in 2013, compared to 1.7% in 2012 and 5.5% in 2011.


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While in recent years the pro-growth factors for the markets of the CIS countries were mostly the high levels of crude oil and raw materials, the situation in the year 2013 confirmed that maintaining the prices of energy raw materials at a high level does not guarantee rapid economic growth. This applies, in particular, to the Russian Federation. The situation in Russia indicates that the country is no longer able to benefit from favourable external conditions. Although the price of URALS crude oil exported by Russia remained at a high level (USD 107.9/barrel in 2013, as compared to USD 110.5/barrel in 2012), all economic growth parameters of the Russian economy have deteriorated, which indicated – not for the first time – that without structural reforms it was not possible to maintain economic growth on the basis of the current model of raw material exports. Industrial production increased in 2013 by a mere 0.3% compared to 2.6% in 2012. Investment sector and the construction industry have experienced an absolute decline of 0.3% and 1.5% respectively. A decline in the growth rate of real income of the population from 4.6% to 3.3% and of real wages from 8.4% to 5.2% had an impact on retail trade turnover, the growth rate of which has decreased from 6.3% in 2012 to 3.9% in 2013. Having regard to the fact that the economic growth in Russia in the recent years was strongly supported by internal demand, including largely by demand created from budget funds, the deterioration of the budget situation and subsequent limitation of spending also had an impact on the decline in economic growth. The situation in Russia had a direct bearing on the economic condition of other markets of the CIS. The CIS countries are still characterized by a relatively high level of inflation. No relevant changes have been recorded in this regard in 2013. The average inflation level amounted to 6.4%, compared to 6.5% in 2012. It is worth mentioning the situation in Belarus, where due to the quickly increasing depreciation of the national currency, inflation is maintained at the level of 18.3%. It is a significantly lower value compared to the hyperinflation at the level of 60% recorded in 2012. High, double digit inflation level can also be found in Uzbekistan. Until recently, even in the forecasts from the beginning of 2014, it was assumed that this year the CIS countries will maintain the economic growth rate at the level similar to the one achieved in 2013. The low GDP dynamics in Russia which prevailed in the subsequent months as well as the economic downturn in the Ukraine, however, have caused the prospects for economic growth for the entire region to deteriorate. In the case of the CIS countries, including, in particular, the Russian Federation, factors which hamper economic growth are of a structural nature and the elimination thereof would require the abandonment of the existing model of economic growth based on the dominant role of the state as well as on fossil fuels and the export thereof, which make the economy dependent upon factors related to the prevailing market conditions. With respect to the Russian economy, apart from structural factors, the economic sanctions related to the events in the Ukraine and the resulting capital outflow will have a substantial impact on the economic slowdown in 2014 (it is estimated that at the end of 2014 the outflow of capital may reach USD 100-150 billion); other factors to consider in this regard include, among others, the decline in foreign investments and the reduced supply of technology. According to the official economic development strategy of the Russian Federation in 2014, the GDP should increase by 0.5% in accordance with the base variant or by 1.1% in accordance with the optimistic variant. As a result of the conflict in the Ukraine and the results of the Russian economy following the first quarter of 2014, international analytical centers are adjusting downwards their previous forecasts for Russia for 2014. The European Bank for Reconstruction and Development has lowered its previous forecast, dated January 2014, from 2.5% to 0% in its most recent forecast published in May this year. On the other hand, the World Bank, in its forecast from May this year,

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estimates that, in 2014, economic growth in Russia will not exceed 0.5%, which is a level 3 times lower than in the earlier forecasts. The prospects for the Ukrainian economy remain unfavourable, with an estimated decline in GDP in 2014 by 5-10%, including a government forecast estimating a 5% decline. The situation in Belarus is expected to improve gradually since the economic downturn in that country has mostly been a consequence of a currency crisis as well as the restrictive fiscal and monetary policies which were necessary to counteract the rampaging inflation. The deteriorating economic situation in Russia will have a hampering effect on these trends. The biggest threat to the improvement of economic situation in the CIS countries is the uncertainty regarding the development of the situation in the Ukraine. Further escalation of adverse events with the direct or indirect involvement of the Russian Federation will result in further sanctions that will, in turn, weaken its economy. This situation will have an impact on the conditions of other countries in this region, including, in particular, Kazakhstan and Belarus, which comprise a customs union with Russia.

1.2 Internal conditions – general situation of the Polish economy

From a global perspective, year 2013 was characterized by a downward trend in terms of economic growth. The Eurozone countries have found themselves in a particularly difficult situation since, due to fiscal problems, they were forced to face a decline in the real GDP (an 0.4% decrease compared to 2012) for the third time in the history of the European common currency area. The GDP of the entire European Union increased by 0.1%. The low level of economic activity in the EU had an adverse impact on the labour market, with unemployment exceeding the level of 20% in some countries. The situation in Poland’s economic environment in 2013 has not been conducive to the creation of added value in the domestic economy. The persisting difficulties linked to the fiscal problems faced by Eurozone countries have resulted in an increased level of risk aversion, hampering the scale of foreign capital influx into the economies of our region. As in the case of the previous years, the negative influence of the debt crisis on Poland’s image as a country attractive to foreign investors was mitigated by the progress made in Poland in terms of fiscal consolidation. Efforts made towards decreasing the relation of public finance sector debt to the GDP have, on one hand, allayed fears of foreign investors as to the financial condition of the state budget, although on the other hand they have also restricted Poland’s capacity to generate internal demand by using expenditure stimuli. Despite the unfavourable external conditions, the economic growth in Poland, at the level of 1.6%, was one of the highest among all European Union Member States (with Poland finishing in the seventh spot, behind Latvia, Romania, Lithuania, Malta, Luxembourg and the United Kingdom, which have attained a GDP growth at the level of 4.1%, 3.5%, 3.3%, 2.6%, 2.1% and 1.7% respectively). The first half of the year brought about a significant economic downturn, the symptoms of which have already become apparent at the end of 2012, although the situation has gradually improved in the second half of the year. Year 2013 marked the further decrease of gross fixed capital formation, resulting from the deferment of investment decisions due to the economic downturn which was particularly apparent in the first half of the year. As a consequence, during the entire year the investment rate was 0.2 p.p. lower, exerting a negative influence on the GDP growth rate in the period under scrutiny.


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In 2013, the dynamics of individual consumption was lower than in the previous year. This was caused by an increase in food prices, dwelling costs and fuel prices, as well as by a difficult situation in the labour market – employment in the corporate sector was lower than in 2012 (even though the situation has improved slightly at the end of the year); the real wages have increased slightly and inflation remained at a low level. As a result, internal demand had no impact on economic growth, and the role of the stimulator of Polish economic growth was played, for yet another year, by foreign demand. Due to an increase in exports, accompanied by a considerably slower growth in imports, the contribution of net exports in the entire year 2013 exceeded 1.6 p.p. The decline in economic activity in the country in the first half of the year was reflected by sector indicators. Although the growth of sales in industry in 2013 was 2.1% higher than in 2012, in the first half of the year a decrease was recorded, which was particularly apparent in the first quarter. Construction output has also declined significantly in the first three quarters of 2013 as a result of the weak condition of the entire sector caused by the low demand for real estate and the absence of positive stimuli generated by large-scale infrastructure projects. Changes in the structure of domestic and foreign demand are strictly related to the role played by particular sectors of the economy in the economic growth over the years. In 2013, the services sector, which has been growing for a couple of years, maintained its positive contribution to the creation of value added. Following the period of economic downturn, during which the contribution of industry to GDP formation became almost neutral, in the years 2010-2012 the impact of industry on GDP growth became positive again. In 2012, the influx of capital related to Foreign Direct Investments (FDI) to Poland amounted to approximately EUR 4.9 billion. According to the initial data of the NBP, in 2013 the balance of capital inflow in the form of FDI attained a negative value (USD -3.8 billion). The low value of FDI in Poland in the years 2012-2013 compared to the previous years was mostly the consequence of the outflow of capital in transit (financial flows, which do not influence employment and production) in the amount of EUR 4.6 billion.

Studies prepared by international analytical centers show, however, that Poland continues to remain among the countries having the greatest degree of attractiveness to investors. According to the data presented in the latest World Investment Report, in years 2014-2016 Poland will be one of the most attractive economies for foreign investors. Poland occupies the 13th position in the ranking – up by one spot compared to the 2013 assessment. The list of the 20 countries considered to be the best locations for FDI contains only 5 European countries, with Poland being the sole representative of the Central and Eastern Europe region. The attractiveness for investments is also confirmed by a survey prepared by Ernst&Young. In the European attractiveness survey 2014, Poland took the number one spot in Central and Eastern Europe with respect to attractiveness for FDI. At the same time, Poland finished first in the region and third overall in terms of the number of jobs created by FDI (13,862 jobs in total). One of the industry sectors which systematically attracts foreign direct investments to Poland is the automotive industry. This particular sector has generated a large amount of interest on the part of companies from all around the world practically from the very beginning of the period of economic transformation. At the present stage, services are continuing to gain in importance in the sector structure of foreign investments in Poland. The entities investing in this sector of the Polish economy are taking advantage, in particular, of the available human resources. Foreign companies operating in Poland are extending the capacity of existing business process outsourcing centers (BOP), shared service centres (SSC), and research and development centers (R+D) as well as opening brand new ones. Poland remains one of the biggest FDI recipients with respect to this type of services, while the

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employees involved in the provision thereof are serving an increasingly large amount of markets – both in terms of their geographic location and industry structure. Chart 3 Inflow of foreign direct investments to Poland in the years 2004-2013 (in EUR million)

-5 000

-3 000

-1 000

1 000

3 000

5 000

7 000

9 000

I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of quarterly NBP data.

One of the primary external factors having an impact on the Polish foreign trade is currency exchange. In 2013, the trend of the appreciation of the Euro against the Polish zloty has continued, although the rate thereof was very limited. Following the 1.6% appreciation of the Euro in 2012, the following two quarters brought about a 1.8% depreciation thereof in Q1 and a 1.3% depreciation in Q2. From the second half of 2013 onwards, the Euro has begun to strengthen against the zloty, with the exchange rate for the Euro being higher by 2.7% and 1.8% in relation to the zloty in Q3 and Q4, respectively. As a result, on an annual scale the average exchange rate for the Euro amounted to PLN 4.1975, which was higher by 0.3% compared to 2012. The slight appreciation of the common currency, which holds the dominant position with respect to the settlements in Polish foreign trade, confirms that it had a relatively neutral impact on foreign trade in 2013. On the other hand, in 2013 the zloty has strengthened against the US dollar – a currency in which approximately 25% of all settlements in Polish exports are made. Following the appreciation of the US dollar in 2012 by as much as 9.9%, year 2013 brought about a 3% depreciation thereof. Furthermore, another significant indicator of the level of competitiveness in foreign exchange are transaction prices in exports and imports. The changes thereof are dependent upon the changes of foreign currency prices as well as on the nominal effective exchange rate – NEER (the exchange rate of the Polish zloty against a basket of major currencies, mainly the Euro and the US dollar). Foreign currency prices increased by 0.7% in 2013, following a 1.3% increase in 2012. The relatively neutral change in the exchange rates for the Euro was mitigated by the weakening of the US dollar against the zloty, which has translated into a decrease of the NEER by 0.3% and, as a result, caused the level of competitiveness of Polish exports to decrease slightly. As a consequence, transaction prices (expressed in PLN) having a direct bearing on the viability of foreign sales made by Polish exporters increased by 0.4% in 2013, compared to the 4.3% increase recorded in 2012.


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Chart 4 Changes in the pace of growth in transaction, foreign currency and NEER prices in exports in the years 2000-2013 (yoy)

85

90

95

100

105

110

115

120

125

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

%Changes of transaction prices

Changes of foreign currency prices

Changes of NEER - nominal effective exchange rate

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of NBP and CSO data.


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2 LONG-TERM CHANGES IN MERCHANDISE TRADE

2.1 Changes during the transformation period

The process of the opening of the Polish economy which has been progressing gradually ever since the beginning of the transformation period has resulted, inter alia, in dynamic trade growth, which became particularly apparent in the second decade of economic change. Since 1991, the export of goods from Poland increased nearly 14 times, reaching the level of USD 206.1 billion in 2013. Imports, on the other hand, grew 13.5 times, attaining the level of USD 208.8 billion. The deficit in the trade in goods, which amounted to USD 0.6 billion in 1991, had been systematically increasing in the first decade of the transformation period. In subsequent years, fluctuations in the level of deficit were recorded; in 2008, the deficit reached a record level of USD 38.6 billion. In 2013, it was reduced to USD 2.6 billion – the lowest level since 1991. The significant increase of the role of exports in the Polish economy and the dynamic growth thereof in the transformation period has resulted in an increased share of Poland in the global merchandise trade – from approximately 0.4% in the beginning of the 1990s and 0.5% in the year 2000 to 1.1% in 2013. Table 8 Polish foreign trade in the years 1991-2013 according to the CSO data

USD million previous year = 100 EUR million previous year = 100

Exports Imports Balance Exports Imports Exports Imports Balance Exports Imports

1991 14,903 15,522 -619 104.1 162.9

1992 13,187 15,913 -2,726 88.5 102.5

1993 14,143 18,834 -4,691 107.2 118.4

1994 17,240 21,596 -4,356 121.9 114.7

1995 22,895 29,050 -6,155 132.8 134.5

1996 24,440 37,137 -12,697 106.7 127.8

1997 25,751 42,307 -16,556 105.4 113.9

1998 28,229 47,054 -18,825 109.6 111.2

1999 27,407 45,911 -18,504 97.1 97.6 25,670 43,050 -17,381

2000 31,596 48,859 -17,263 115.5 106.6 34,322 53,034 -18,712 133.9 123.3

2001 36,040 50,191 -14,151 114.1 102.7 40,316 56,129 -15,813 117.5 105.8

2002 40,943 55,023 -14,079 113.6 109.6 43,330 58,212 -14,882 107.5 103.7

2003 53,450 67,886 -14,435 130.5 123.4 47,399 60,183 -12,784 109.4 103.4

2004 73,781 88,156 -14,375 138.0 129.9 59,698 71,354 -11,656 125.9 118.6

2005 89,378 101,539 -12,161 121.1 115.2 71,423 81,170 -9,746 119.6 113.8

2006 109,584 125,645 -16,061 122.6 123.7 87,926 100,784 -12,858 123.1 124.2

2007 138,785 164,172 -25,387 126.6 130.7 101,839 120,389 -18,551 115.8 119.5

2008 171,860 210,479 -38,619 123.8 128.2 116,244 142,448 -26,204 114.1 118.3

2009 136,641 149,570 -12,929 79.5 71.1 98,218 107,529 -9,311 84.5 75.5

2010 159,758 178,063 -18,305 116.9 119.1 120,373 134,188 -13,815 122.6 124.8

2011 190,247 212,331 -22,083 119.1 119.2 136,694 152,568 -15,875 113.6 113.7

2012 184,661 198,463 -13,803 97.1 93.5 143,456 154,040 -10,584 104.9 101.0

2013 206,138 208,780 -2,642 111.6 105.2 154,994 156,978 -1,984 108.0 101.9

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of CSO data.

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Within the period of the last two decades the value of exports has been growing dynamically, including, in particular, the period between 2000 and 2008, when the annual average growth rate amounted to 22.9% (in US dollars terms), while in the years 1991-1999 the value of export increased on average by 8.1% per annum. The annual average import growth, on the other hand, was more rapid in the first decade of the transformation period (rising by 20.4% in the period between 1991 and 1999) compared to the period between 2000 and 2008 (when it increased by 18.9%). As has been the case in the period between 2000 and 2008, following a period of crisis-related trading breakdown in 2009, the years 2010-2013 brought about a faster pace of export growth (up by 11.2%) than in the case of import growth (up by 9.2%). Of particular importance is the fact that the rapid growth of exports has significantly exceeded the GDP growth rate. Whereas the GDP in years 2000-2013 increased slightly more than twofold (from EUR 186 billion to EUR 390 billion), the value of exports increased 4.5 times, rising from EUR 34 billion to EUR 155 billion). The relation of the commodities turnover to the GDP – considered as an indicator which reflects the level of openness of the economy – amounted to 80% in 2013, whereas in the year 2000 the value thereof remained at a level of approximately 47%, rising from about 35% in the beginning of the 1990s. This constant trend indicates that the Polish economy and the goods and services originating from Poland are more and more competitive on the global market. These results confirm that Poland’s economic growth, including the growth of exports, remains – as is the case with most economies in Central and Eastern Europe which are undergoing a process of transformation – strongly dependent upon the influx of foreign investments, which are usually vehicles for innovation and technology and, at the same time, generate imports related to investment and supply (which currently constitute about 80% of total imports to Poland). The said imports directly influence the development of the production potential and the modernisation of the economy, while at the same time having a decisive influence on the scale of trade deficit. It is therefore possible to state that an increase in imports – particularly rapid at the beginning of the transformation period – is an integral and natural part of the development of the Polish economy. Additionally, it is important to emphasize that an inflow of foreign investments resulting in a growth in imports generates, after some time, an increase in exports due to the fact that such foreign entities become involved in export activities. Following the period of the initial years of the transformation process during which foreign investors were mostly willing to expand their activities into the fertile Polish domestic market, the last decade brought about – along with the increased inflow of FDI – a dynamic shift towards exports among foreign investors. It is estimated that at the present stage the share of entities with foreign capital in Polish exports amounts to approximately 60%. The rapid export growth rate during the last decade is also the result of the modernization of the structure thereof, which is also, to a large extent, the consequence of the fact that most FDIs in Poland remain export-oriented. Whereas during the first decade of the transformation period the Polish export activities were to a large extent oriented towards traditional branches of industry such as the textile, metallurgical, timber and mining industry, the second decade brought about significant changes with respect to exports, which have progressed, to a significant extent, from a traditional model towards a more developed-oriented one. The share of electromechanical products – products having the highest degree of hi-tech content – amounted to 39.3% in 2013, which means that it has nearly doubled compared to the beginning of the 1990s as a consequence of the dynamic growth of the automotive, machinery and electronics industries which occurred, inter alia, due to the involvement of foreign investors.


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During the period in question, the significance of chemical products in exports has also increased substantially, rising from approximately 8% to 14.1%. The food and agricultural sector has achieved an undeniable success, which has been particularly apparent following Poland’s EU accession. The exports in this sector have been rising dynamically in the last couple of years. In 2013 the export of food products amounted to EUR 20.4 billion – 13.2% of the total Polish exports. During the analyzed period, the contribution of light industry products towards Polish exports has seen the most dramatic decline – whereas in the beginning of the 1990s such products accounted for approximately 15% of our exports, in 2013 they accounted for a mere 3.6%. The significance of minerals and metallurgical products – products which undergo a low level of processing – has also decreased markedly. In the beginning of the transformation period, such products accounted for nearly 30% of all Polish exports in total, whereas in 2013 their contribution towards export volume fell nearly by half, attaining the level of 15.7%. The highly competitive nature of Polish exports – and of the Polish economy as a whole – is confirmed by the fact that the dominant portion of our exports is earmarked for the developed (and thus more demanding) countries, including, in particular, EU markets which account for approximately three quarters of all Polish exports, with Germany having been Poland’s most significant trading partner for many years now (one-fourth of all Polish exports are sold on the German market). The essential precondition for maintaining the favourable trends in Polish foreign trade and achieving market success is the efficient pursuit of innovative activities aimed at the creation of state-of-the-art products and services as well as the constant search for new solutions which satisfy the shifting needs of domestic and international consumers alike. Increasing the level of innovativeness of the Polish economy, including the constant modernization of the exported goods and services, constitutes one of the most significant challenges at the present stage.

2.2 Changes in trade since Poland’s EU accession The value of the export of goods attained in 2013 (EUR 155 billion) was 2.6 times higher than in 2004, when the value of exports amounted to EUR 59.7 billion. The value of imports into Poland increased 2.2 times, attaining the value of EUR 157 billion compared to EUR 71.4 billion in 2004. During that time, export to the entire European Union increased 2.4 times – i.e. slightly slower than average. It is worth noting that while the exports to the “old EU” countries increased 2.2 times, attaining the value of nearly EUR 89.9 billion, the exports to new EU Member States (9+3) increased 3.3 times, reaching the value of EUR 26.3 billion. It may therefore be states that whereas the trade exchange with EU-15 states has been relatively extensive even before Poland’s EU accession, the first 10 years in the EU allowed Poland to establish closer economic ties with new Member States. This has translated into an increase of the contribution of EU-12 countries towards the Polish export volume (from 13.3% to nearly 17%), which coincided with the decrease of the contribution made by EU-15 countries, which decreased by 9.3 p.p., to a level of 58%. The significant increase of cooperation with the Visegrád Group countries is particularly apparent, as evidenced, inter alia, by their rising significance for Polish trading activities. The Czech Republic has become our third most important trading partner (behind Germany and the United Kingdom), with a 6.2% share in 2013, whereas in 2004 this country ranked only fifth in this regard, with a 4.3% share. Slovakia has made an even greater progress – in 2004, Slovakia took the 16th spot with a 1.8% share, while in 2013 it advanced to the 10th position (with a 2.6% share). Hungary, on the other hand,

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took the 11th spot – right behind Slovakia – with a share amounting to 2.5% – unchanged since 2004. The total value of exports to the Czech, Slovak and Hungarian markets in 2013 amounted to more than EUR 17.6 billion, i.e. 11.4% of all our exports. At the same time, their share in the volume of imports into Poland amounted to 7.3%, i.e. approximately EUR 11.5 billion. The higher dynamics in terms of export into the EU during the period of the Polish membership has allowed the deficit in the amount of nearly EUR 1 billion in 2004 to be converted into a systematically increasing trade surplus which amounted to EUR 24.5 billion in 2013. Such favourable changes in the trade balance with EU markets as well as – from a broader perspective – with developed markets, where a deficit in the amount of EUR 2.9 billion was transformed into a surplus in the amount of EUR 23.4 billion, makes it possible, to a large extent, to compensate for the deficit with respect to the import of energy raw materials as well as the structurally conditioned high level of deficit in the trade exchange with Asian markets (including, in particular, China and South Korea). The trade deficit with respect to a large number of developing and emerging markets has increased in the period under scrutiny from EUR 8.9 billion to EUR 25.4 billion. In the European Union, Poland’s trade balance has improved both in relation to old EU Member States (up by EUR 15.7 billion to a level of EUR 13.3 billion) and to the new members of the EU (up by EUR 9.7 billion, to a level of EUR 11 billion), In total, the positive trade balance with Visegrád Group countries in 2013 amounted to almost EUR 6.2 billion. Table 9 Changes in the geographical structure of trade in goods (in EUR million)

2013 2004

EUR million share (%) in: EUR million share (%) in:

Exports Imports Balance exports Imports Exports Imports Balance exports imports

Poland, total 154,994 156,978 -1,984 100.0 100.0 59,698 71,354 -11,656 100.0 100.0

Developed economies 126,989 103,568 23,421 81.9 66.0 51,790 54,642 -2,852 86.8 76.6

EU 116,293 91,803 24,489 75.0 58.5 48,165 49,158 -993 80.7 68.9

Germany 38,888 34,006 4,882 25.1 21.7 17,909 17,397 512 30.0 24.4 United Kingdom 10,079 4,109 5,970 6.5 2.6 3,229 2,368 861 5.4 3.3 Czech Republic 9,596 5,755 3,841 6.2 3.7 2,581 2,582 -1 4.3 3.6 France 8,703 5,991 2,712 5.6 3.8 3,603 4,795 -1,192 6.0 6.7 Italy 6,691 8,356 -1,665 4.3 5.3 3,647 5,619 -1,972 6.1 7.9 Netherlands 6,150 6,080 71 4.0 3.9 2,564 2,486 78 4.3 3.5 Sweden 4,207 2,949 1,259 2.7 1.9 2,087 1,929 159 3.5 2.7 Slovakia 4,091 3,116 974 2.6 2.0 1,066 1,175 -109 1.8 1.6 Hungary 3,948 2,583 1,365 2.5 1.6 1,533 1,346 186 2.6 1.9 Spain 3,447 3,365 82 2.2 2.1 1,462 1,902 -440 2.4 2.7

EFTA 4,409 4,296 113 2.8 2.7 1,510 1,869 -359 2.5 2.6

Norway 3,079 2,931 148 2.0 1.9 1,064 1,027 37 1.8 1.4

Non-EU developed economies

6,287 7,469 -1,182 4.1 4.8 2,115 3,615 -1,501 3.5 5.1

USA 3,643 4,172 -529 2.4 2.7 1,437 1,713 -276 2.4 2.4 Canada 759 301 458 0.5 0.2 214 198 16 0.4 0.3 Japan 508 2,153 -1,644 0.3 1.4 138 1,386 -1,247 0.2 1.9

Developing economies

28,005 53,410 -25,405 18.1 34.0 7,794 16,689 -8,895 13.1 23.4

CIS 15,329 21,862 -6,533 9.9 13.9 4,677 7,115 -2,438 7.8 10.0

Russia 8,147 19,047 -10,901 5.3 12.1 2,299 5,166 -2,866 3.9 7.2 Ukraine 4,307 1,670 2,637 2.8 1.1 1,640 840 800 2.7 1.2 Belarus 1,821 587 1,234 1.2 0.4 457 564 -107 0.8 0.8

Other developing economies

12,676 31,547 -18,872 8.2 20.1 3,117 9,575 -6,458 5.2 13.4

Turkey 2,294 1,819 474 1.5 1.2 731 899 -168 1.2 1.3 China 1,594 14,623 -13,029 1.0 9.3 449 3,287 -2,838 0.8 4.6


Another significant market is the United Kingdom, which has become Poland’s second biggest trading partner, with a share which amounted to 6.5% in 2013 compared to 5.4% in 2004, where it took the


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fourth place. The trade surplus with respect to the UK attained the level of EUR 6 billion in 2013, i.e. EUR 5.1 billion more than in the year of Poland’s EU accession. The second decade of the economic transformation period, including the period of Poland’s EU membership, has been a time of transformation of the Polish exports, which embarked upon the path towards state-of-the-art, highly processed products. Despite offering relatively high quality, Polish products remain affordable – a feature that is appreciated not only by consumers in developed countries, but also on many developing and emerging markets. This fact is demonstrated by the results achieved in terms of export to this group of states, which has increased 3.6 times since 2004; this has, in turn, translated into an increase of their share in Polish exports by 5 p.p., to a level of 18.1% in 2013. Commonwealth of Independent States markets (including, in particular, the Russian Federation, Ukraine and Belarus) account for a substantial share in this group of recipients of Polish exports (nearly 10% of the total exports in 2013). Within the period under scrutiny, the export to this group of countries has increased more rapidly than average, i.e. approximately 3.3 times, exceeding the amount of EUR 15.3 billion. The sale of Polish goods in the Russian Federation in the years 2004-2013 increased more than 3.5 times, reaching the level of over EUR 8.1 billion; exports to the Ukraine and Belarus increased 2.6 and 4 times respectively, attaining a level of EUR 4.3 billion and 1.8 billion respectively. Eastern markets have, for a number of years, been considered as an opportunity for Polish exports; however, the substantial economic downturn in both Russia and Ukraine at the beginning of 2014 has translated into diminished exports to those markets. Exports to other developing countries (other than CIS states) has increased fourfold, reaching the level of EUR 12.7 billion in 2013; the contribution of the countries in question to the Polish exports has increased to 8.2%, compared to 5.2% back in 2004. In the group of countries in question, the volume of Polish export has increased in the most dynamic manner with respect to the countries of the Middle East, including Turkey (a more than threefold rise, to the level of EUR 2.3 billion), United Arab Emirates (a 7.5-fold rise, to the value of approximately EUR 570 million) and Saudi Arabia (a nearly fourfold rise, to the level of EUR 380 million), as well as certain far-eastern markets such as China (where the exports increased 3.6 times, reaching the level of EUR 1.6 billion), Singapore (a twelvefold rise, to the level of EUR 555 million), South Korea (a 9,4-fold rise, to the level of EUR 545 million) and India (where the exports increased 5.4 times, reaching the level of EUR 370 million). The dynamic increase in sales to the developing markets experienced in recent years may indicate the growing interest of exporters in the export of goods to non-European markets as well as the relatively high degree of flexibility and capacity to adjust to the constantly changing economic environment on the markets of Poland’s primary trading partners. Recession and the protracted economic slowdown in many European economies during the last couple of years has prompted many enterprises to expand their export activities to include new, more distant markets. While the current situation may cause these trends to ebb slightly with respect to the Eastern markets (mostly Russia and Ukraine), in the case of most other developing markets one may expect the further increase in the involvement of Polish exporters. In the years 2004-2013 the structure of the Polish foreign trade in goods has also changed with respect to the goods in question. Electromechanical products, which are considered as being the most highly processed and most technologically advanced products that our country is exporting – retain the dominant position among all Polish exports, with a 39.3% share in 2013; the pace of growth of exports in this field in the period

MINISTRY OF ECONOMY

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in question was only slightly slower than average, as the export of electromechanical products increased 2.5 times. At the same time, the import of the products in question increased 1.9 times, which has translated into a significant qualitative shift in the trade in electromechanical products. The profound deficit recorded back in the year of Poland’s EU accession (EUR 5.1 billion) has been transformed into a constantly rising surplus, which has attained the value of EUR 4.4 billion in 2013. This has been primarily the consequence of the improved balance with respect to the trade in boilers, machinery, mechanical appliances and parts thereof (in the case of which the EUR 3.6 billion deficit has been transformed into a surplus in the amount of nearly EUR 0.4 billion), vehicles, and parts and accessories thereof (in the case of which the existing surplus has increased by nearly EUR 4 billion to a level of EUR 4.3 billion) as well as electrical machinery and equipment (in the case of which the existing deficit has been reduced by EUR 1.1 billion, down to approximately EUR 140 million). Table 10 Changes in exchange of commodities aggregated in 10 commodity groups (in EUR million)

2013 2004

EUR million share (%) in: EUR million share (%) in:

Exports Imports Balance exports imports Exports Imports Balance exports imports

Poland, total 154,994 156,978 -1,984 100.0 100.0 59,698 71,354 -11,656 100.0 100.0 Agricultural and food products

20,427 14,313 6,115 13.2 9.1 5,242 4,406 836 8.8 6.2

Mineral products 7,515 19,463 -11,949 4.8 12.4 3,427 7,435 -4,008 5.7 10.4 Products of the chemical industry

21,902 27,643 -5,741 14.1 17.6 6,095 12,454 -6,359 10.2 17.5

Leathers and leathers products

738 942 -205 0.5 0.6 365 654 -290 0.6 0.9

Wood and paper industry products

7,115 5,303 1,811 4.6 3.4 3,778 2,979 799 6.3 4.2

Light industry products

5,609 7,633 -2,023 3.6 4.9 3,197 4,406 -1,209 5.4 6.2

Ceramic products 4,027 2,031 1,996 2.6 1.3 1,592 1,186 406 2.7 1.7 Metallurgical products

16,941 16,290 651 10.9 10.4 7,501 7,402 99 12.6 10.4

Products of the electromechanical industry

60,959 56,570 4,389 39.3 36.0 23,991 29,096 -5,105 40.2 40.8

Miscellaneous and other

9,717 6,676 3,041 6.3 4.3 4,511 1,335 3,176 7.6 1.9


During the period of Poland’s EU membership, the significance of agricultural and food products as well as products of the chemical industry for Polish export levels has also increased substantially. The latter group holds the second position in the Polish foreign trade in goods in terms of value – in 2013 it accounted for 14.1% of overall exports, i.e. 3.9 p.p. more than in 2004, which has been the result of an above-average increase in the sales of the products in question, which increased 3.6 times to the level of EUR 21.9 billion. The less dynamic growth of the import of such products during that time (the imports in question have increased 2.2 times) has made it possible to achieve a slight reduction of the relatively high trade deficit, bringing it down by more than EUR 0.6 billion to a level of EUR 5.7 billion. With respect to the export of agricultural and food products, on the other hand, Poland has achieved an undeniable success, which is confirmed by a 3.9-fold growth since the time of EU accession, to the level of EUR 20.4 billion; the share of the export of agricultural and food products in total exports rose from 8.8% to 13.2%. The best results were achieved with respect to the export of prepared foodstuffs (a 4-fold increase, to the level of EUR 9.1 billion) as well as of animal products (a nearly 3.8-fold increase, to the level of EUR 6.6 billion), including meat and edible meat offal, the export of which increased 5.4-fold, reaching the level of EUR 3.4 billion. The fact which may serve as testimony to the high quality and good reputation which Polish food products enjoy is that 82% of the export thereof is earmarked for the more demanding foreign consumers in developed countries. It is also worth emphasizing that Poland has achieved a


39

systematically growing surplus in the trade in agricultural and food products, the said surplus amounting to EUR 6.1 billion in 2013, compared to slightly over EUR 0.8 billion in 2004. Favourable export conditions which translate into the significant improvement of the trade balance in dominant groups of the goods exported allow for a substantial compensation of the traditionally high deficit with respect to the trade in mineral products. In 2013, the deficit in question reached the amount of EUR 11.9 billion, compared to EUR 4 billion in the year of Poland’s EU accession.


41

3 SCALE AND DYNAMICS OF TRADE IN GOODS IN 2013

3.1 Trade according to data of the NBP

Following the 5.6% growth in exports recorded in 20121, in 2013 it slowed down to the level of 5%, attaining the value of nearly EUR 156 billion. Imports, on the other hand, attained the value of nearly EUR 153.7 billion, which is the same as in 2012, when import grew by 2.3%. The fact that export growth exceeded import growth brought about a decisive improvement in terms of commodities trade balance, which improved by EUR 7.5 billion, allowing for the trade deficit in the amount of almost EUR 5.2 billion recorded in 2012 to be transformed into an EUR 2.3 billion surplus. Table 11 Poland's trade in goods in the years 2012-2013 (in EUR million)

2013 dynamics in % same period

of past year = 100

2012 dynamics in % same period

of past year = 100

Months

exports imports balance

exports Imports

exports imports balance

exports imports

January 12,214 12,278 -64 106.4 101.1 11,480 12,144 -664 107.4 107.9

February 12,352 11,926 426 104.3 93.8 11,839 12,708 -869 105.5 106.5

March 12,780 13,282 -502 98.8 98.7 12,930 13,462 -532 103.9 102.7

Q1 37,346 37,486 -140 103.0 97.8 36,249 38,314 -2,065 105.5 105.6

April 13,303 12,673 630 111.0 101.6 11,985 12,479 -494 103.8 98.6

May 12,256 12,255 1 100.3 93.9 12,225 13,052 -827 100.1 99.4

June 12,773 12,203 570 105.4 98.1 12,121 12,442 -321 102.5 96.1

Q2 38,332 37,131 1,201 105.5 97.8 36,331 37,973 -1,642 102.1 98.0

1st half of the year

75,678 74,617 1,061 104.3 97.8 72,580 76,287 -3,707 103.8 101.7

July 13,228 13,091 137 107.4 103.1 12,313 12,692 -379 111.7 103.9

August 12,535 12,236 299 102.8 99.7 12,196 12,268 -72 105.7 98.5

September 14,010 13,350 660 109.0 104.2 12,853 12,816 37 101.9 99.5

Q3 39,773 38,677 1,096 106.5 102.4 37,362 37,776 -414 106.2 100.6

after 3 quarters

115,451 113,294 2,157 105.0 99.3 109,942 114,063 -4,121 104.6 101.3

October 15,145 14,886 259 103.8 104.6 14,590 14,229 361 119.1 109.9

November 13,747 13,772 -25 102.3 100.6 13,434 13,693 -259 111.2 106.6

December 11,613 11,698 -85 110.1 100.0 10,545 11,701 -1,156 98.9 99.1

Q4 40,505 40,356 149 105.0 101.8 38,569 39,623 -1,054 110.2 105.4

YEAR 155,956 153,650 2,306 105.0 100.0 148,511 153,686 -5,175 106.0 102.3

Monthly average

12,996 12,804 192 12,376 12,807 -431

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of NBP data.

1 Data of the National Bank of Poland; discrepancies between annual data (presented in the text) and the sum of monthly values of trade (presented in Table 11) are due to the use of different exchange rates in calculations, i.e. monthly average in the case of monthly data and quarterly average in the case of annual data.

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The growth of the export of services from Poland (which, according to the statistics pertaining to the balance of payments, currently accounts for approximately 16% of the Poland’s total exports) experienced a much sharper decline than in the case of the export of goods. Following an increase by 9.5% in 2012, in 2013 it only grew by 2.4%, attaining the level of EUR 30.2 billion. The import of services has also experienced a slowdown in 2013, growing by 0.4% and attaining the level of nearly EUR 25 billion, compared to the 8.5% increase recorded in 2012. Poland has attained a surplus in the foreign trade in services; it amounted to EUR 5.2 billion in 2013, which constitutes an increase by EUR 0.6 billion compared to 2012. In 2013, a significant reduction of deficit was recorded on the current account – the deficit fell by EUR 9.2 billion to a level of approximately EUR 5 billion, the cause of which – in addition to the improvement in terms of commodities trade balance as well as the increase of the surplus in the services trade – has also been the improvement of the balance with respect to revenues (reduction of deficit by EUR 940 million, to the level of EUR 16.7 billion). This has more than compensated for the lower current transfers balance, the surplus of which has decreased by approximately EUR 170 million, down to the level of EUR 3.8 billion. As a result, the relation of the current account balance to the GDP has improved, attaining the value of -1.4% in 2013 compared to -3.7% in 2012. Chart 5 Relation of the current account balance to the GDP (in %)

-7.0

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

%Commodities exchange balance/GDPCurrent account balance/GDP

-25

-20

-15

-10

-5

0

5

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

EUR bn Commodities exchange balanceCurrent account balance

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of NBP and Eurostat data.


43

Table 12 Trade in goods and services as well as balance on current account and their relations per capita and against GDP in the years 2009-2013

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of CSO, NBP and Eurostat data.

Ratio/data 2009 2010 2011 2012 2013

PLN billion

GDP 1,344.5 1,416.6 1,528.1 1,596.4 1,635.7 Exports of goods 439.8 499.3 577.3 621.2 654.7 Imports of goods 463.2 534.8 618.8 643.0 645.0 Balance of commodities exchange -23.4 -35.5 -41.4 -21.8 9.8 Exports of services 89.5 98.7 111.2 123.4 126.9 Imports of services 74.7 89.4 94.7 104.0 104.9 Balance of services 14.8 9.3 16.5 19.5 22.0 Exports of goods and services 529.3 598.1 688.6 744.7 781.6 Imports of goods and services 537.9 624.2 713.5 747.0 749.8 Balance of goods and services -8.6 -26.2 -24.9 -2.3 31.8 Current account balance -52.2 -72.3 -76.8 -59.4 -20.9

Relation to GDP in %

Exports of goods / GDP 32.7 35.2 37.8 38.9 40.0 Exports of goods and services / GDP 39.4 42.2 45.1 46.6 47.8 Imports of goods / GDP 34.5 37.8 40.5 40.3 39.4 Imports of goods and services / GDP 40.0 44.1 46.7 46.8 45.8 Balance of trade in goods / GDP -1.7 -2.5 -2.7 -1.4 0.6 Balance of goods and services / GDP -0.6 -1.8 -1.6 -0.1 1.9 Current account balance / GDP -3.9 -5.1 -5.0 -3.7 -1.4

per capita in PLN thousand

Exports of goods per capita 11.5 13.0 15.0 16.1 17.0 Imports of goods per capita 12.1 13.9 16.1 16.7 16.8 Exports of goods and services per capita 13.9 15.5 17.9 19.3 20.3 Imports of goods and services per capita 14.1 16.2 18.5 19.4 19.5 Current account balance per capita -1.4 -1.9 -2.0 -1.5 -0.5

EUR billion

GDP 310.7 354.6 370.9 381.5 389.7 Exports of goods 101.8 125.0 140.2 148.5 156.0 Imports of goods 107.2 133.9 150.2 153.7 153.7 Balance of commodities exchange -5.4 -8.9 -10.1 -5.2 2.3 Exports of services 20.7 24.7 27.0 29.5 30.2 Imports of services 17.3 22.4 22.9 24.9 25.0 Balance of services 3.4 2.3 4.0 4.6 5.2 Exports of goods and services 122.5 149.7 167.1 178.0 186.2 Imports of goods and services 124.5 156.3 173.2 178.5 178.6 Balance of goods and services -2.0 -6.6 -6.0 -0.5 7.6 Current account balance -12.2 -18.1 -18.5 -14.2 -5.0

Relation to GDP in %

Exports of goods / GDP 32.8 35.3 37.8 38.9 40.0 Exports of goods and services / GDP 39.4 42.2 45.1 46.7 47.8 Imports of goods / GDP 34.5 37.8 40.5 40.3 39.4 Imports of goods and services / GDP 40.1 44.1 46.7 46.8 45.8 Balance of trade in goods / GDP -1.7 -2.5 -2.7 -1.4 0.6 Balance of goods and services / GDP -0.6 -1.8 -1.6 -0.1 1.9 Current account balance / GDP -3.9 -5.1 -5.0 -3.7 -1.4

per capita in EUR thousand

Exports of goods per capita 2.7 3.2 3.6 3.9 4.1 Imports of goods per capita 2.8 3.5 3.9 4.0 4.0 Exports of goods and services per capita 3.2 3.9 4.3 4.6 4.8 Imports of goods and services per capita 3.3 4.1 4.5 4.6 4.6 Current account balance per capita -0.3 -0.5 -0.5 -0.4 -0.1

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3.2 Trade according to data of the CSO The value of export of goods increased in 2013 by 8%, reaching the level of USD 155 billion. During that time, the value of imports into Poland reached the level of EUR 157 billion, which is 1.9% higher than in 2012. These results have translated into a substantial reduction in the commodities trade deficit, which fell by nearly EUR 8.6 billion to a level of about EUR 2 billion. Table 13 Commodities turnover in the years 2012-2013 according to the CSO data

EUR million dynamics in % same period of past year =100

USD million dynamics in % same period of past year =100

period

exports imports balance exports Imports exports imports balance exports imports

January 10,995 12,102 -1,106 109.3 109.0 14,454 15,909 -1,455 109.2 108.9

February 11,070 12,355 -1,285 101.3 101.7 14,320 16,084 -1,763 97.3 98.4

March 12,421 13,396 -975 100.8 99.0 16,435 17,725 -1,290 98.4 96.7

Q1 34,487 37,853 -3,366 103.5 102.9 45,210 49,718 -4,508 101.3 100.9

April 11,718 12,673 -955 106.9 101.1 15,549 16,816 -1,267 100.0 94.7

May 12,159 13,499 -1,340 103.8 102.9 15,821 17,593 -1,772 93.3 92.6

June 11,604 12,404 -800 100.5 94.1 14,674 15,685 -1,011 89.2 83.5

Q2 35,482 38,576 -3,094 103.7 99.3 46,044 50,094 -4,050 94.0 90.2


69,969 76,430 -6,461 103.6 101.1 91,254 99,812 -8,558 97.5 95.2

July 11,857 12,593 -736 111.2 102.5 15,056 15,991 -935 98.0 90.3

August 11,688 12,097 -409 101.8 93.8 14,358 14,861 -503 88.2 81.2

September 12,736 13,096 -359 100.3 96.7 15,893 16,342 -448 87.4 84.2

Q3 36,281 37,786 -1,505 104.1 97.6 45,308 47,193 -1,886 90.9 85.2

after 3 quarters

106,250 114,216 -7,965 103.8 99.9 136,562 147,006 -10,444 95.2 91.7

October 14,081 14,279 -199 118.7 110.0 18,348 18,607 -259 113.2 105.0

November 12,999 13,815 -817 108.1 104.3 16,808 17,865 -1,056 101.2 97.6

December 10,126 11,730 -1,603 97.0 97.8 12,943 14,986 -2,043 92.6 93.4

Q4 37,206 39,825 -2,619 108.4 104.2 48,099 51,458 -3,359 102.8 98.8

YEAR 2012 143,456 154,040 -10,584 104.9 101.0 184,661 198,463 -13,803 97.1 93.5

Monthly average

11,955 12,837 -882 15,388 16,539 -1,150

January 12,324 12,706 -383 112.1 105.0 16,352 16,842 -490 113.1 105.9

February 12,320 12,212 108 111.3 98.8 16,425 16,279 146 114.7 101.2

March 12,707 13,543 -835 102.3 101.1 17,052 18,169 -1,117 103.8 102.5

Q1 37,351 38,461 -1,110 108.3 101.6 49,828 51,290 -1,461 110.2 103.2

April 13,143 12,831 313 112.2 101.2 16,974 16,584 390 109.2 98.6

May 12,413 12,677 -264 102.1 93.9 16,371 16,712 -341 103.5 95.0

June 13,034 12,792 242 112.3 103.1 16,862 16,557 306 114.9 105.6

Q2 38,590 38,299 291 108.8 99.3 50,207 49,852 355 109.0 99.5


75,941 76,760 -819 108.5 100.4 100,035 101,142 -1,107 109.6 101.3

July 13,052 13,291 -239 110.1 105.5 17,333 17,627 -294 115.1 110.2

August 12,366 12,470 -104 105.8 103.1 16,365 16,491 -126 114.0 111.0

September 13,924 13,528 395 109.3 103.3 18,641 18,109 532 117.3 110.8

Q3 39,342 39,290 52 108.4 104.0 52,340 52,228 112 115.5 110.7

after 3 quarters

115,282 116,050 -768 108.5 101.6 152,375 153,370 -995 111.6 104.3

October 14,631 14,862 -230 103.9 104.1 19,532 19,840 -308 106.5 106.6

November 13,603 13,984 -381 104.6 101.2 18,710 19,224 -514 111.3 107.6

December 11,477 12,083 -605 113.3 103.0 15,522 16,347 -825 119.9 109.1

Q4 39,712 40,928 -1,216 106.7 102.8 53,763 55,411 -1,648 111.8 107.7

YEAR 2013 154,994 156,978 -1,984 108.0 101.9 206,138 208,780 -2,642 111.6 105.2

Monthly average

12,916 13,081 -165 17,178 17,398 -220



45

The value of the trade in goods has increased at a markedly more rapid pace in US dollar terms. In 2013, the export of goods amounted to USD 206.1 billion, i.e. 11.6% higher than in the previous year, while the import of goods reached the level of USD 208.8 billion, i.e. 5.2% more than in 2012. The trade deficit in the amount of USD 13.8 billion recorded in the previous year has therefore been reduced to the level of approximately USD 2.6 billion. In terms of the national currency, export grew by 7.4% to the level of PLN 647.9 billion, while import increased by 1.2%, reaching the level of PLN 656.1 billion. At the same time, the deficit has been reduced from PLN 44.7 billion in 2012 to PLN 8.2 billion in 2013. In terms of volume, the export of goods in 2013 increased by 6.9%, while imports increased by 2.9%.


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4 CHANGES IN THE GEOGRAPHICAL STRUCTURE OF TRADE IN GOODS

4.1 Changes seen from the continental perspective The dynamics of the Polish exports to Europe has, for a number of years, been slightly lower (from 0.5 p.p. to 1 p.p.) than the annual average growth rate of total exports. This translates into a systematic, albeit marginal decrease of the contribution of European countries towards Polish exports. In 2013, exports to European markets increased by 7% to the level of EUR 136.3 billion, which accounted for 88% of the total Polish exports, compared to 89% in the previous year and over 90% in 2009. The diminishing share of European countries demonstrates that Polish exporters are seeking alternative, non-European sales markets and are able to adjust to the economic conditions which prevail on the markets of their trading partners in a flexible manner. The growth of imports from European markets was markedly less dynamic during that time as imports grew by 0.8%, reaching the level of EUR 117.8 billion, accounting for 75% of all imports into Poland. These results have translated into a significant increase of the surplus in the trade with European countries – up by EUR 8 billion, to a level of approximately EUR 18.5 billion. The second most important region of the world in terms of the share in Polish foreign trade is Asia, even though the contribution thereof towards imports is disproportionally higher than towards export. In recent years, exports to Asia increased at a markedly faster pace than the overall export growth; in 2013, export to this region of the world grew 2.3 p.p faster (by 10.3%), reaching the level of EUR 9.8 billion. This accounted for 6.3% of the entire Polish exports. As regards imports, on the other hand, following two years of slowdown, in 2013 imports picked up the pace slightly, with the growth rate thereof attaining the level of 4.9%. The level achieved in 2013 (EUR 29.3 billion) accounted for 18.6% of the total Polish import. In its trade exchange with Asia, Poland continues to record a deficit, which amounted to EUR 19.5 billion in 2013, exceeding the previous year’s deficit by approximately EUR 450 billion. The third most important market in terms of trade volume is America. In 2013, exports to this region has increased significantly, reaching the level of 21.6%, which coincided with a slow growth in imports – by 6%. The above-average increase in the trade exchange with America has resulted in the strengthening of the position thereof in Polish export by 0.5 p.p. (4% of all exports) as well as in Polish import (up by 0.2 p.p. – 4.7% of all imports). The fact that in 2013 exports have significantly exceeded imports has made it possible to reduce the trade deficit by nearly EUR 0.7 billion, down to EUR 1.1 billion. Among the markets in this region the trade volume with North America was greater than the trade volume with Central and South America. In the case of the former group of countries, as a result of the dynamic surge in exports – up by 24.8% to a level of nearly EUR 4.4 billion – as well as the relatively slow import growth – up by 2.8% to a level of approximately EUR 4.5 billion, the trade deficit was curbed by nearly EUR 0.8 billion to a level of EUR 0.1 billion. Exports to the countries of Central and South America increased by 14.4% (attaining the level of EUR 1.8 billion), while imports rose by 11.6%, reaching the level of EUR 2.8 billion, which translated into an increase of the negative trade balance by approximately EUR 0.1 billion, to the level of EUR 1.1 billion.

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Among all continents, the exports to Africa have experienced the most substantial growth in 2013, rising by 30% to a level of EUR 2 billion, which accounted for 1.3% of the entire Polish exports. Imports from African countries rose more than five times slower, increasing by 5.8% to a level of EUR 1.4 billion (0.9% of all imports), which resulted in an increase in trade surplus by nearly EUR 0.4 billion to the level of almost EUR 0.6 billion. The distant markets of Australia and Oceania account for a negligible share in Polish trade. In 2013 a mere 0.4% of all Polish exports has reached those markets (approximately EUR 620 million). Imports from those markets accounted for only 0.2% of all imports (approximately EUR 365 million).

4.2 Changes in main groups of countries In 2013, much like in the previous years, the growth of exports to developing countries has exceeded the growth of exports to developed markets, even though exports to the former group have fallen compared to the previous year, while the exports to the latter have noticeably picked up the pace. Following an increase by 2.4% in 2012, in 2013 exports to developed markets only grew by 7.4%, attaining the level of EUR 127 billion. Meanwhile, the imports from the markets in question, following a decrease by 2.4% in 2012, grew by 4.1% in 2013, attaining the level of EUR 103.6 billion. As a result, the share of this group of countries in Polish exports has decreased slightly, falling by 0.5 p.p. to a level of 81.9%, while their share in imports grew by 1.4 p.p., attaining the level of 66%. At the same time, the surplus in trade with developed markets has seen a clear increase in 2013, rising by nearly EUR 4.7 billion and attaining the level of EUR 23.4 billion. The trading situation with the broad category of developed markets was quite diverse. Exports to the European Union grew at a below-average pace (up by 6.3%), while exports to non-EU developed countries experienced a surge, rising by 20.3%, including a 17.2% increase in exports to EFTA countries and a 22.5% increase in exports to other developed countries. The situation in terms of import mirrored that of export, with import growth being markedly more rapid in case of non-EU developed countries2 (up by 8.4%) than in the case of EU countries (up by 3.5%). The rapid increase in imports from the former group has been the result of the surge in imports from EFTA countries (up by 21.3%), since imports from other countries increased by a mere 2.1%. These results have translated into an increase in trade balance both with the EU, where the trade surplus increased by nearly EUR 3.8 billion (attaining the level of EUR 24.5 billion) and with non-EU developed countries, where the trade deficit has been reduced by EUR 0.9 billion (down to approximately EUR 1.1 billion). Exports to the developing markets grew at a markedly faster pace than exports to developed countries, rising by 11.2% and attaining the level of EUR 28 billion. Imports from this group of countries, on the other hand, fell by 2% to a level of EUR 53.4 billion, resulting in the reduction of the sizeable trade deficit by EUR 3.9 billion – down to EUR 25.4 billion. Trade with CIS countries grew at a significantly slower pace than in the case of other developing markets. Exports to the Commonwealth of Independent States increased by 7.7% in 2013 (attaining the level of EUR 15.3 billion) while imports fell by 11.7% (down to EUR 21.9 billion); in case of other less developed markets export growth amounted to 15.8% (attaining the level of EUR 12.7 billion), while imports increased by 6.1% (attaining the level of EUR 31.5 billion).

2 By convention, this group includes developed markets other than the EU and EFTA countries, i.e. the United States, Canada, Japan, South Africa, Australia, Israel, New Zealand, Gibraltar, San Marino, Faroe Islands, Andora, Ceuta, Bouvet Island, Melilla, the Vatican and Monaco.


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Table 14 Changes in the geographical structure of Polish trade in goods and their impact on the trade balance (in EUR million)

2013 2012 Changes 2013/2012

Exports Imports Balance Exports Imports Balance

Exports growth (+) decline (-)

Imports growth (-) decline (+)

Balance impr. (+) wors. (-)

Poland, total 154,994 156,978 -1,984 143,456 154,040 -10,584 11,538 -2,938 8,600 previous year = 100 108.0 101.9 104.9 101.0 Developed countries 126,989 103,568 23,421 118,278 99,521 18,758 8,711 -4,048 4,663 previous year = 100 107.4 104.1 102.3 97.6 share

including: 81.9 66.0 82.5 64.6

EU 116,293 91,803 24,489 109,385 88,667 20,718 6,908 -3,137 3,771 previous year = 100 106.3 103.5 102.3 97.3 share

including: 75.0 58.5 76.3 57.6

Germany 38,888 34,006 4,882 36,057 32,836 3,221 2,830 -1,170 1,661 previous year = 100 107.8 103.6 101.1 96.5 share 25.1 21.7 25.1 21.3 United Kingdom 10,079 4,109 5,970 9,708 3,763 5,945 371 -346 25 previous year = 100 103.8 109.2 110.2 93.9 share 6.5 2.6 6.8 2.4 Czech Republic 9,596 5,755 3,841 9,067 5,656 3,410 530 -99 431 previous year = 100 105.8 101.8 106.2 99.6 share 6.2 3.7 6.3 3.7 France 8,703 5,991 2,712 8,404 6,010 2,394 299 20 318 previous year = 100 103.6 99.7 100.4 94.3 share 5.6 3.8 5.9 3.8 Italy 6,691 8,356 -1,665 6,951 8,080 -1,129 -260 -277 -537 previous year = 100 96.3 103.4 95.3 98.1 share 4.3 5.3 4.9 5.3 Other developed countries

10,696 11,765 -1,069 8,893 10,854 -1,960 1,803 -911 892

previous year = 100 120.3 108.4 103.0 100.3 share

including: 6.9 7.5 6.2 7.1

USA 3,643 4,172 -529 2,797 3,945 -1,148 846 -227 619 previous year = 100 130.3 105.8 104.9 114.2 share 2.4 2.7 2.0 2.6 EFTA 4,409 4,296 113 3,761 3,541 220 648 -755 -106 previous year = 100 117.2 121.3 94.6 95.5 share 2.8 2.7 2.6 2.3 Developing countries 28,005 53,410 -25,405 25,178 54,520 -29,342 2,827 1,110 3,937 previous year = 100 111.2 98.0 119.2 107.8

share including:

18.1 34.0 17.6 35.4

CIS 15,329 21,862 -6,533 14,232 24,772 -10,540 1,097 2,910 4,007 previous year = 100 107.7 88.3 122.3 113.4 share

including: 9.9 13.9 9.9 16.1

Russia 8,147 19,047 -10,901 7,678 21,629 -13,951 469 2,581 3,050 previous year = 100 106.1 88.1 125.1 117.7 share 5.3 12.1 5.4 14.0 Other countries 12,676 31,547 -18,872 10,945 29,747 -18,802 1,731 -1,800 -70 previous year = 100 115.8 106.1 115.4 103.5 share

including: 8.2 20.1 7.6 19.3

China 1,594 14,623 -13,029 1,358 13,687 -12,329 237 -937 -700 previous year = 100 117.4 106.8 100.8 103.3 share 1.0 9.3 1.0 8.9


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4.2.1 The European Union The tendency of a more rapid growth of exports to non-Eurozone markets of the EU, which has persisted for a number of years, has remained unchanged in 2013, with exports to those countries increasing by 7.8% (up to EUR 37.7 billion), i.e. at a pace only slightly lower than average. The exports to the Eurozone markets, on the other hand, increased by 5.6% (to the level of EUR 78.6 billion), increasing by 4.9 p.p. compared to the previous year. As a result, exports to the entire EU in 2013 increased by 6.3%, attaining the level of EUR 116.3 (compared to a 2.3% increase in the previous year). Among the more significant EU markets, exports to the following countries have recorded the most substantial growth:

− Bulgaria – up by 42.9% (i.e. by EUR 225 million), to the level of approximately EUR 750 million; − Latvia – up by 33.5% (i.e. by approximately EUR 330 million), to the level of approximately EUR

1.3 billion; − Spain – up by 20.7% (i.e. by EUR 0,6 billion), to the level of EUR 3,4 billion; − Belgium – up by 14.3% (i.e. by approximately EUR 430 million), to the level of EUR 3.4 billion; − Hungary – up by 13.8% (i.e. by approximately EUR 480 million), to the level of EUR 3.9 billion; − Finland – up by 10.8% (i.e. by approximately EUR 115 million), to the level of nearly EUR 1.2

billion. Exports to Germany – our most important trading partner – increased at a slightly slower pace than average in 2013 – up by 7.8% (i.e. by over EUR 2.8 billion), attaining the level of EUR 38.9 billion. Among all EU Member States, exports has decreased most substantially with respect to 5 Eurozone markets; the most substantial declines were recorded with respect to:

− The Netherlands – down by 4.3% (i.e. by approximately EUR 280 million), to the level of approximately EUR 6.2 billion;

− Italy – down by 3.7% (i.e. by approximately EUR 260 million), to the level of approximately EUR 6.7 billion; and

− Estonia – down by 5.3% (i.e. by approximately EUR 45 million), to the level of approximately EUR 840 million.

Imports from EU countries, on the other hand, increased by 3.5% (i.e. by EUR 3.1 billion, attaining the level of EUR 91.8 billion), resulting in an import growth that was 1.6 p.p. faster than average, even though the growth of exports to those markets still exceeded the growth of imports by 2.8 p.p. This has translated to an increase of the trade surplus with the EU by nearly EUR 3.8 billion, attaining the level of EUR 24.5 billion in 2013; with respect to the Eurozone markets, the surplus increased by EUR 2.1 billion, whereas with respect to other EU Member States it grew by EUR 1.7 billion. As in the case of exports, imports from the Eurozone markets increased at a slower pace (up by 3%, attaining the level of EUR 71.6 billion) compared to imports from other EU countries (up by 5.5%, attaining the level of EUR 20.2 billion). Among the more significant EU import markets, imports from the following countries have increased most substantially compared to the previous year:

− Lithuania – up by 19.9% (i.e. by approximately EUR 180 million), to the level of nearly EUR 1.1 billion;

− Romania – up by 13.2% (i.e. by approximately EUR 130 million), to the level of EUR 1.1 billion;


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− Ireland – up by 13% (i.e. by approximately EUR 115 million), to the level of EUR 1 billion;

− The United Kingdom – up by 9.2% (i.e. by approximately EUR 350 million), to the level of EUR 4.1 billion;

− Spain – up by 6.3% (i.e. by EUR 0.2 billion), to the level of nearly EUR 3.4 billion;

− Austria – up by 6.2% (i.e. by approximately EUR 160 million), to the level of nearly EUR 2.8 billion and

− Belgium – up by 5.4% (i.e. by EUR 185 million), to the level of EUR 3.6 billion.

Declines in imports were recorded with respect to 5 Eurozone markets, including: − Finland – down by 4.5% (i.e. by approximately EUR 60 million), to the level of EUR 1.3 billion; − Slovakia – down by 3.5% (i.e. by approximately EUR 115 million), to the level of approximately

EUR 3.1 billion; and − France – down by 0.3% (i.e. by approximately EUR 20 million), to the level of EUR 6 billion.

At the same time, the three countries referred to above were in the group of 19 EU markets with respect to which the trade balance has improved in 2013; trade balance with Slovakia improved by approximately EUR 480 million, with France – by approximately EUR 320 million, and with Finland – by approximately EUR 180 million. Apart from the three countries referred to above, a favourable change in the balance of exchange has occurred, inter alia, with respect to:

− Germany, where the export dynamics has exceeded the import dynamics more than twofold, translating into an increase in the surplus by nearly EUR 1.7 billion to a level of nearly EUR 4.9 billion;

− The Czech Republic, where exports grew more rapidly than imports (up by 5.8% and 1.8% respectively), translating into an increase of the trade surplus by approximately EUR 430 million, attaining the level of EUR 3.8 billion;

− Hungary, where exports grew much more rapidly than imports, which has recorded a moderate growth (up by 13.8% and 2.8% respectively), translating into an increase of the trade surplus by approximately EUR 0.4 billion, to the level of EUR 1.4 billion;

− Spain, where the export dynamics has exceeded the import dynamics 3.3-fold, resulting in the trade deficit amounting to approximately EUR 0.3 billion in 2012 being translated into a surplus at the level of approximately EUR 80 million;

− Sweden, where exports grew more rapidly than imports, which has recorded a moderate growth (up by 9.4% and 0.8% respectively), translating into an increase of the trade surplus by approximately EUR 340 million, attaining the level of nearly EUR 1.3 billion;

− Latvia, where exports have surged by 33.5% – five times more rapidly than imports, translating into an increase in the trade surplus by slightly more than EUR 0.3 billion, to a level of nearly EUR 1.1 billion.

As far as products exported from Poland to the EU are concerned, the products which accounted for the most substantial part of Polish exports in 2013 were:

− electromechanical products – 37%, i.e. EUR 43 billion; − chemical industry products – 14.2%, EUR 16.5 billion; − agricultural and food products – 13.8%, i.e. EUR 16 billion; − metallurgical products – 11.4%, EUR 13.3 billion.

The exports in agricultural products and foodstuffs increased most rapidly in 2013 – by 15,7% to EUR 16 billion. Among food products the most significant products in terms of exports were: meat and edible meat offal (2.2% of total exports to the EU – EUR 2.6 billion), milk and dairy products (nearly 1.3% – EUR 1.5 billion) and tobacco and manufactured tobacco substitutes (1.2%, EUR 1.4 billion).

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The sale of chemical products increased at a relatively rapid pace in 2013, rising by 10.4% to the level of EUR 16.5 billion, resulting in a greater share in total exports (14.2%). As far as this group is concerned, the most favourable situation was recorded in the case of export of plastics and articles thereof (an increase by 11.5%, to EUR 5.7 billion, which accounted for 4.9% of total exports to the EU), pharmaceutical products (an increase by 22.2%, to EUR 1.7 billion, which accounted for 1.4% of total exports to the EU) as well as soap and washing preparations (an increase by 16.4%, to a level of EUR 1.1 billion, i.e. 1% of all exports to EU). The exports of electromechanical goods, holding a dominant position insofar as trade with EU Member States is concerned, increased relatively slower in 2013 – by 5.5%, reaching the level of EUR 43 billion. This was due to a low growth rate in the export of non-rail vehicles, parts and accessories thereof (the most important section within this group), which increased by a mere 2.8% (attaining the level of EUR 13.4 billion) as well as in the export of boilers, machinery and mechanical appliances, which increased by 4.9% (attaining the level of EUR 13.6 billion), which has translated into a slight increase of the contribution made by these sections, down to a level of 11.5% and 11.7% respectively. On the other hand, the export of electrical machinery and equipment rose at an above-average rate (up by 7.1%, to the level of EUR 13.2 billion). The export of metallurgical products to the EU fell by 0.4% in 2013 (down to nearly EUR 13.3 billion), which has been the result of the diminished export of iron, cast iron and steel (down by 6.3%) as well as of copper and copper products (down by 9.3%). The trade exchange between Poland and the EU is intra-industry in nature, therefore in terms of the imports from these markets – much like in the case of exports – electromechanical products and chemical products retain the greatest significance (35.8% and 23.4% respectively). Metallurgical products and agricultural and food products took the third and fourth spot with a share of 13.5% and 10.8% respectively.

4.2.2 Non-EU developed markets The relatively slow growth in terms of trade with EU Member States may be contrasted with the dynamic increase in the trade with non-EU developed markets, where exports surged by 20.3% (attaining the level of EUR 10.7 billion), while imports increased by 8.4% (to the level of EUR 11.8 billion). Among this group of countries, trade exchange has been more dynamic with respect to non-EFTA countries, where, as a consequence of a dynamic rise in exports – up by as much as 22.5%, attaining the level of EUR 6.3 billion – as well as the comparably lower import growth (up by 2.1%, attaining the level of EUR 7.5 billion), the trade deficit has been reduced by EUR 1 billion to the level of EUR 1.2 billion. Among this group of markets, the exports to the following countries increased most dynamically: the United States (up by 30.3%), South Africa (up by 17.8%), Japan (up by 15.5%) and Israel (up by 9.1%). This, coupled with the slowdown in terms of imports or, in some cases, the decline thereof, has resulted in favourable changes in trade balance. The most favourable changes in the trade balance were recorded with respect to the United States, where the deficit has been reduced by EUR 620 million (down to approximately EUR 530 million) and Canada (an increase in the surplus by EUR 140 million, to a level of approximately EUR 460 million), Japan (a decrease of the deficit by EUR 135 million, down to the level of EUR 1.6 billion), South Africa (an increase in the surplus by approximately EUR 110 million, to the level of EUR 250 million). Among the non-EFTA developed markets, the United States remains our most significant trading partner, with 58% of all Polish exports to this group of countries being earmarked for the USA and with


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56% of all import from this group originating there. With respect to the trade with the USA, electromechanical products continue to remain the most significant group of products, having accounted for approximately 56% (EUR 2 billion) of the entire exports to those markets in 2013 as well as for 58% of all imports (EUR 2.4 billion). In terms of exports to the US market, minerals took the second place with a 11.6% share (approximately EUR 420 million), while in terms of imports the second spot was taken by chemical products (with a share of 18.7%, i.e. approximately EUR 780 million). Nearly 30% of all goods imported to Poland from non-EU, non-EFTA developed markets originates from Japan. Electromechanical products account for approximately ¾ of imports from Japan (over EUR 1.6 billion), including mechanical and electrical equipment and parts thereof, which account for approximately 50% of those electromechanical products (nearly EUR 1.1 billion). Chemical products account for approximately 16% of all imports from the market in question (about EUR 345 million). The value of exports from Poland into Japan is disproportionately lower than the value of imports; in 2013 it amounted to EUR 0.5 billion, which accounted for merely 8.1% of Polish exports to this group of countries. As in the case of imports, electromechanical products remain the most important group of products (accounting for approximately 41% of all Polish exports to Japan). Export to EFTA countries grew by 17.2% in 2013 (attaining the level of EUR 4.4 billion), failing to overtake the import growth rate for these markets, since import grew by 21.3% during that time (attaining the level of EUR 4.3 billion). This has translated into a decrease of the trade surplus by approximately EUR 0.1 billion, as a result of which the surplus level amounted to slightly over EUR 0.1 billion. Such a dynamic increase in trade exchange has been the consequence of the results attained in the trade with Poland’s most important partner among all EFTA markets – Norway. Exports to that market grew by 26.2%, attaining the level of nearly EUR 3.1 billion), while imports increased by 33.2%, attaining the level of EUR 2.9 billion). As a result, in 2013 Norway has received 70% of all Polish exports earmarked for EFTA markets and also accounted for 68% of all Polish imports from this group of markets. Polish exports to the Norwegian market were dominated by electromechanical products (a 65.4% share, i.e. approximately EUR 2 billion) and metallurgical products (a 12.8% share, i.e. approximately EUR 0.4 billion), the export of which increased by 32.7% and 14.4% respectively. As in the case of exports, electromechanical products continue to play the most important role in terms of imports from Norway; as a result of a sudden increase in imports (up by 77.6%), these products have increased their share in all imports to the level of approximately 42%, compared to 31.2% in 2012. The second and third spot with respect to imports from Norway were taken by food products (a 21.5% share, i.e. approximately EUR 630 million) and minerals (a 19.4% share, i.e. approximately EUR 570 million).

4.2.3 Commonwealth of Independent States Following a dynamic growth in exports to the CIS (up by 22.3%) recorded in 2012, in 2013 it slowed down to 7.7%, attaining the value of EUR 15.3 billion. At the same time, imports from this group of countries decreased by 11.7% (down to a level of nearly EUR 21.9 billion), which has resulted in the reduction of the negative trade balance by EUR 4 billion, down to approximately EUR 6.5 billion. Among the CIS markets, an increase in exports was recorded for nearly all countries in this region (except for Tajikistan), including the Russian Federation (up by 6.1%, i.e. by approximately EUR 470 million, to the level of EUR 8.1 billion), the Ukraine (up by 5.1%, i.e. by EUR 210 million, to the level of EUR 4.3 billion) and Belarus (up by 16.5%, i.e. by nearly EUR 260 million, to the level of EUR 1.8 billion). Furthermore, in 2013 there has been a surge in exports to Moldova, which have increased by as much as 63.5%, attaining the level of EUR 270 million.

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At the same time, in 2013 there has been a significant decrease in imports from Poland’s three most important trading partners within the CIS, i.e. the Russian Federation, Ukraine and Belarus, which has resulted in a substantial improvement in terms of trade balance. The reduction of the negative trade balance with the Russian Federation in 2013 was caused by the substantial decline in imports from this market, which fell by 11.9% to the level of EUR 19 billion; the import of mineral products, having the biggest share in imports from this market, decreased by 11.7%. It needs to be borne in mind that the demand for the import of these products is generated by the necessary import of energy raw materials; since the growth if import volume thereof has remained stable for a number of years now, the scale thereof in terms of value remains directly dependent upon global prices, which have fallen in 2013. In 2013, the monthly average price of crude oil attained the level of USD 108.6 per barrel, i.e. 2.7% lower than in the previous year (111.7 USD per barrel). As a consequence, the substantial aggregate trade deficit with Russia recorded in the previous year (nearly EUR 14 billion) has been reduced to the level of EUR 10.9 billion in 2013, falling by nearly EUR 3.1 billion. Favourable changes in trade balance have also been recorded with respect to the export of electromechanical products, which retain the dominant position among all exports to the Russian Federation (39% of all exports to this market). The sudden decrease in the import thereof (down by 41.5%, to a level of approximately EUR 0.2 billion), combined with a slight increase in exports (up by 1.5%, to the level of EUR 3.2 billion) has translated into an increase of the trade surplus by nearly EUR 0.2 billion, to a level of approximately EUR 3 billion. The trade surplus with respect to boilers, machinery and mechanical appliances increased by approximately EUR 170 million, while with respect to electrical machinery and equipment it fell by EUR 100 million. This has more than compensated for the deterioration of the trade balance with respect to non-rail vehicles, parts and accessories thereof (down by approximately EUR 175 million). Improvement in terms of trade balance has also occurred with respect to the trade in agricultural and food products. Although the export thereof increased by 19.6% in 2013, while the import grew by 26.1%, due to the disproportionally higher value of exports (14 times higher than the value of imports), the surplus increased by approximately EUR 190 million, attaining the level of nearly EUR 1.2 billion. This has mostly been the result of the improvement in terms of trade balance with respect to three product groups, namely: milk and dairy products and meat and edible meat offal (up by approximately EUR 57 million each) as well as fruits and edible nuts (up by approximately EUR 50 million). With respect to the Ukraine, the improvement in terms of trade balance recorded in 2013 (up by approximately EUR 520 million to the level of more than EUR 2.6 billion) resulted, above all, from favourable changes in the trade in mineral products and agricultural and food products. In case of the former group of goods, as a result of a dynamic increase in exports (up by 28.8%) as well as the declines in imports by 2.9%, the deficit recorded in the previous year at the level of about EUR 120 million has been transformed into a surplus in the amount of EUR 2.5 million. With respect to agricultural and food products there has been a decrease in exports by 8.2%, coupled with a decrease in imports by 31.4%, translating into an improvement in trade balance by EUR 120 million. Significant changes have also occurred with respect to trade exchange with Belarus, where, on one hand, exports have experienced a dynamic rise (up by 16.5% to the level of EUR 1.8 billion), while on the other hand there has been a steep decline in imports (down by 23.6%, to the level of nearly EUR 0.6 billion). As a result, the balance of exchange with this market has improved by approximately EUR 440 million, reaching the level of EUR 1.2 billion. Trade balance with respect to the dominant group of products in terms of imports – minerals – improved by approximately EUR 180 million, while with


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respect to the dominant group of products in terms of exports – electromechanical products – it improved by approximately EUR 155 million.

4.2.4 Other developing countries (except the CIS) Exports to other developing and less-developed countries increased significantly faster than the exports to the CIS, growing by 15.8% and attaining an amount of nearly EUR 12.7 billion. Although imports to these countries has increased 2.6 times slower (by 6.1%, to the level of EUR 31.5 billion), due to the significantly higher value thereof this fact has failed to translate into a trade deficit reduction, which amounted to nearly EUR 18.9 billion – EUR 70 million higher than in 2012. With respect to the merchandise trade with this group of countries, electromechanical products continue to remain the most important product group. In 2013, as a result of a dynamic increase in exports (up by 27.2%, to the level of EUR 6.5 billion) and in imports (up by 10.7%, to the level of EUR 17.2 billion), these products have increased their share in the total trade exchange volume. During that year, these products accounted for 51.6% of the entire Polish exports to these markets as well as for 54.6% of the entire Polish import. Within this group of goods, electrical machinery and equipment and boilers, machinery and mechanical appliances as well as ships, boats and floating structures continue to dominate both streams of trade exchange. In 2013, with respect to the trade in electromechanical products with less developed markets other than CIS countries, Poland has recorded a deficit at a level of EUR 10.7 billion, i.e. about EUR 260 million more than in 2012. The second most significant commodity group with respect to the exports to these markets are chemical products, although their share has diminished to 12.5% as a result of a decline in export by 2.6% (to a level of approximately EUR 1.6 billion). This has been the consequence of declining exports of the most important groups of products, i.e. caoutchouc and caoutchouc products as well as organic chemicals (down by 6.1% and over 30% respectively). Agricultural and food products also continue to play an important role with respect to exports to less developed markets (other than CIS states); in 2013, the export thereof increased by 11.5%, while their contribution towards all exports to this group of countries amounted to 11.7%. Meat and edible meat offal (a 2.1% share), milk products (a 1.9% share) and cereals (a 1.5% share) account for the largest volumes of food products sold by Poland to the markets in question. As has already been mentioned, imports from this group of countries – as in the case of exports – remains dominated by electromechanical products. Light industry products took the second spot, attaining a 13% share (EUR 4.1 billion). Among developing and less developed countries other than CIS countries, the following favourable changes with respect to trade balance deserve a mention:

− South Korea, where as a result of a dynamic increase in exports (up by 32.4%, to a level of approximately EUR 550 million), combined with a decline in imports (down by 9.5% to a level of nearly EUR 3.2 billion), the trade deficit fell by EUR 465 million, attaining the level of EUR 2.6 billion. These results have been the consequence of changes with respect to the trade in electromechanical products, which continue to dominate the trade exchange with this country (with a share of approximately 76% in terms of both imports and exports). The export of such products has experienced a surge, rising by 54.5%, to the level of over EUR 0.4 billion, while imports fell by 13.1% (attaining the level of EUR 2.4 billion). Insofar as electromechanical products are concerned, there has been a particularly significant increase in the export of boilers, machinery and mechanical appliances and parts thereof as well as ships, boats and

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floating structures; in terms of import, on the other hand, the most substantial declines were recorded with respect to optical, measuring and medical instruments and apparatuses;

− Saudi Arabia, where as a result of a dynamic increase in exports (up by 40.1%, to the level of EUR 380 million), combined with a steep decline in imports (down by 64.4% to a level of nearly EUR 76 billion), the trade surplus increased by almost EUR 250 million, attaining the level of EUR 0.3 billion;

− Serbia, where export growth (up by 75%, to the level of EUR 635 million) has significantly exceeded import growth (up by 46.9%, to a level of approximately EUR 160 million), resulting in the increase if the positive trade balance by approximately EUR 220 million to the level of nearly EUR 480 million and

− United Arab Emirates, where as a result of a dynamic increase in exports (up by 66.4%, to the level of EUR 570 million), combined with a relatively slow import growth (by 6.9% to a level of EUR 85 billion), the trade surplus increased by almost EUR 220 million, attaining the level of EUR 485 billion.

Other countries from the presently discussed group of markets with respect to which there has been an improvement in the balance of exchange exceeding the amount of EUR 0.1 billion include: Argentina (improvement by EUR 0.2 billion), Malaysia (improvement by approximately EUR 110 million) and Tunisia (improvement by almost EUR 107 million). On the other hand, the most significant deterioration of the balance of exchange has occurred with respect to the following developing and less developed countries (excluding the Commonwealth of Independent States):

− China, where despite the dynamic increase in exports (up by 17.4%, to the level of EUR 1.6 billion) and the relatively slow rise in imports (up by 6.8%, to the level of EUR 14.6 billion), the trade deficit has deepened by EUR 0.7 billion, to the level of EUR 13 billion. The most significant exports to this market are metallurgical products (with a 38.2% share, i.e. EUR 0.6 billion), including copper and copper products, which account for 34.6% of all exports into China. The second most important group is electromechanical products (a 29% share, i.e. EUR 460 million), including boilers, machinery and mechanical appliances and parts thereof (10.6%) and electrical machinery and appliances and parts thereof (10.1%). The primary imports from China into Poland include electromechanical products (accounting for 61% of all imports, i.e. EUR 8.9 billion), including electrical machinery and appliances and parts thereof (a 33.1% share, i.e. EUR 4.8 billion) as well as boilers, machinery and mechanical appliances and parts thereof (a 23.1% share, i.e. nearly EUR 3.4 billion). Electromechanical products are also the primary culprit insofar as the trade deficit with respect to this market is concerned; in 2013 the amount of deficit in the trade in such products was nearly EUR 8.5 billion, which accounts for 65% of the total negative trade balance with China. Compared to 2012, the amount of deficit rose by more than EUR 0.8 billion.

− India, the exports to which plummeted by 28.3%, to the level of EUR 370 million, while imports rose by 14.1% (attaining the level of EUR 1.1 billion), which has translated into an increase of the negative trade balance by nearly EUR 0.3 billion, to a level of over EUR 0.7 billion;

− Turkey, the exports to which fell by 4.5%, to the level of EUR 2.3 billion, combined with an 8.9% increase in imports (which reached the level of EUR 1.8 billion); as a result, the surplus recorded in the previous year has fallen by nearly EUR 260 million, attaining the level of about EUR 0.5 billion. In terms of exports into Turkey, electromechanical products hold the dominant position; the sale of such products in 2013 fell by 1.1% (down to EUR 1.4 billion) while their contribution to overall export amounted to 62.8%. Among the goods from this group, there has, on one hand, been a steep decline in the export of electrical machinery and appliances and parts thereof (down by 34.9%), while on the other hand the export of boilers, machinery and


57

mechanical appliances and parts thereof as well as of non-rail vehicles, parts and accessories thereof have increased dynamically, attaining the level of 20.9% and 28% respectively. Chemical products took the second spot, attaining a level similar to that which was recorded in the previous year, i.e. approximately EUR 360 million. The trade in agricultural and food products was particularly adversely affected in 2013, despite the fact that in 2012 they were the third most significant group of goods exported into Turkey (with an 8.2% share). Year 2013 brought about a sharp decline in the sale thereof – exports fell by 66.4% to a level of approximately EUR 65 million, which has caused their contribution to overall export to drop to 2.9%. This has been the consequence of a near-total suspension of the export of meat and edible meat offal as well as the sharp decline in the sales of tobacco and manufactured tobacco substitutes (down by 62.8%). In terms of imports from Turkey, the most significant products are electromechanical products (a 41% share, i.e. approximately EUR 750 million) as well as light industry products (with an approximately 25.8% share, i.e. approximately EUR 470 million).

− Vietnam, the imports from which has increased dramatically in 2013 (a 35.2% rise, to the level of EUR 860 million), while exports fell by 9.6% to a level of approximately EUR 110 million, which has translated into an increase in trade deficit by approximately EUR 235 million, to the level of EUR 750 million.

Chart 6 Geographic structure of the balance of Polish foreign trade in goods in 2013, compared to 2012 and 2009 (in EUR billion)

-22.0 -18.0 -14.0 -10.0 -6.0 -2.0 2.0 6.0 10.0 14.0 18.0 22.0 26.0

European Union

Other developed countries

Commonwealth of Independent

States

Other developing countries

EUR bn

2009 2012 2013



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5 CHANGES IN THE COMMODITY STRUCTURE OF TRADE IN GOODS

In 2013 – as in the previous year – the leading position in Polish exports were taken by:

− electromechanical industry products, the contribution of which to the total exports amounted to 39.3%;

− chemical industry products (with a 14.1% share);

− agricultural and food products (with a 13.2% share); and

− metallurgical products (with a 10.9% share). Chart 7 Changes in Polish export of main commodity groups in the years 2009-2013 (in EUR, previous year = 100)

60

80

100

120

140

%

Total 84.5 122.6 113.6 104.9 108.0

electromechanical 88.2 117.0 107.5 101.1 108.9

chemical 85.1 132.8 120.2 106.3 109.0

agricultural 98.3 117.5 112.7 117.5 114.2

metallurgical 66.9 133.7 120.2 103.6 100.8

2009 2010 2011 2012 2013


Chart 8 Changes in Polish import of main commodity groups in the years 2009-2013 (in EUR, previous year = 100)

60

80

100

120

140%

Total 75.5 124.8 113.7 101.0 101.9

electromechanical 76.8 121.0 105.1 100.4 105.4

chemical 80.8 126.7 114.6 98.8 104.7

mineral 61.3 143.7 133.3 105.1 89.5

metallurgical 64.3 135.1 119.3 97.3 100.7

2009 2010 2011 2012 2013


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Among the main commodity groups, the most significant export growth was recorded with respect to agricultural and food products – up by 14.2%, to the level of EUR 20.4 billion. The situation in this product group followed the trend set in 2012, when the export of this group grew at a significantly more rapid pace than was the case with other groups, rising by 17.5% compared to the average export growth at the level of 4.9%. As has already been mentioned, the dynamic increase in the export of foodstuffs experienced in recent years has become one of our export specialties and allowed this group of products to systematically increase its contribution towards the total Polish exports, reaching the level of 13.2% in 2013, compared to 12.5% in 2012 and 11.1% in 2011. Among the more significant food products, the export of plant products has experienced the most substantial increase in 2013 (up by 16.7%, attaining the level of more than EUR 4.1 billion), accounting for 2.7% of the total exports from Poland. The most significant sections within this group included:

− fruits and edible nuts, etc. – the export thereof rose by 9.1%, attaining the level of nearly EUR 1.2 billion, while their share in total exports amounted to 0.7%;

− vegetables, certain edible roots and bulbs – the export of these products rose by 10.2%, attaining the level of approximately EUR 950 million (i.e. 0.6% of total exports); and

− cereals – the export of these products rose by 24.2%, attaining the level of approximately EUR 840 million (i.e. 0.5% of total exports).

There has also been a dynamic increase in the export of animal products (up by 13.8%, attaining the level of over EUR 6.6 billion) as well as of prepared foodstuffs (up by 12.2%, attaining the level of EUR 9.1 billion), the total contribution of which to Polish exports amounted to 4.3% and 5.9% respectively. The export of meat and edible meat offal accounted for the biggest share of the export of products from this group; the export of meat and edible meat offal rose by 11.4%, to the level of nearly EUR 3.4 billion (this item accounted for 2.2% of total exports). Dairy products, eggs, natural honey etc. took the second spot, rising by 15.4% and attaining the level of nearly EUR 1.9 billion (i.e. 1.2% of total exports). With respect to prepared foodstuffs, on the other hand, the most dynamic increase in exports was recorded with respect to cocoa and cocoa products (up by 21.4%, to the level of EUR 1.1 billion), non-alcoholic and alcoholic beverages and vinegar (up by 19.1%, to the level of EUR 560 million) as well as products of cereals, flour, starch or milk etc. – up by 17.4%, to the level of nearly EUR 1.2 billion. Tobacco and manufactured tobacco substitutes also accounted for a significant share of exports, rising by 5.2% in 2013, attaining the level of EUR 1.5 billion. The growth recorded with respect to the import of agricultural and food products (up by 5.6%, to the level of EUR 14.3 billion) has been significantly slower than the growth of export thereof, which made it possible to increase the trade surplus with respect to foodstuffs by EUR 1.8 billion to the level of EUR 6.1 billion. This has mostly been the result of an increase of the surplus in the trade in prepared foodstuffs, which rose by approximately EUR 845 million, attaining the level of EUR 3.4 billion, as well as of the improvement in terms of the balance of exchange with respect to plant products, in the case of which the 2012 deficit in the amount of EUR 20 million has been transformed into a surplus in the amount of approximately EUR 570 million. The primary recipient of agricultural and food products from Poland are EU Member States, which have purchased 78% of the total Polish export of food products in 2013 (i.e. EUR 16 billion). At the same time, the trade with the EU makes it possible for Poland to attain a decisive surplus with respect to the trade in agricultural and food products (amounting to nearly EUR 6.1 billion). Among EU Member States, the primary market for our products is Germany, which accounted for 23.1% of all export of foodstuffs from Poland, i.e. EUR 4.7 billion. Other primary recipients of the goods in question in 2013


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included: the United Kingdom (EUR 1.5 billion), the Czech Republic (EUR 1.2 billion), France (EUR 1.2 billion), Italy and the Netherlands (nearly EUR 1.1 billion each). The CIS markets accounted for 10.7% of all Polish foodstuffs exports in 2013 (nearly EUR 2.2 billion), with almost 60% of all exports to CIS markets (nearly EUR 1.3 billion) being earmarked for the Russian Federation. A surplus in the trade with this group of countries has been attained, amounting to nearly EUR 1.7 billion. On the other hand, a moderate deficit with respect to the trade in agricultural and food products has been recorded in the trade with EFTA countries (approximately EUR 530 million) as well as with developing markets other than the CIS (approximately EUR 1.1 billion). Exports of the second-biggest groups of goods exported from Poland in terms of value (with a 14.1% share), i.e. products of the chemical industry attained the level of over EUR 21.9 billion in 2013 – 9% higher than the level recorded in the previous year. Among others, the export of the following goods has recorded an above-average growth:

− plastics and plastic products – up by 11.5%, reaching the level of EUR 7.1 billion, which accounted for 4.6% of all Polish exports;

− pharmaceutical products – up by 25.7%, reaching the level of nearly EUR 2.4 billion (i.e. 1.5% of all exports); and

− soaps, laundry products, lubricating preparations, polishing preparations, etc. – up by 13%, reaching the level of over EUR 1.4 billion (0.9% of all exports).

The export of cautchouc and cautchouc products, which accounts for a large part of the export of chemicals, has increased slightly slower than average, rising by 6.3% and attaining the level of EUR 4 billion (2.6% of all exports). The import of chemical products rose by 4.7% and attained the level of EUR 27.6 billion. Plastic and plastic products and pharmaceutical products accounted for the most substantial part of all imports; the import of goods from the above categories increased by 5.4% and 4.8% respectively, attaining the level of EUR 9.2 billion and EUR 4.3 billion respectively, while the shares of those categories in total imports amounted to 5.9% and 2.7% respectively. The deficit in chemicals trade has been reduced to the level of EUR 5.7 billion (down by approximately EUR 570 million). This was achieved primarily due to an improvement in the following categories:

− pharmaceutical products – the reduction of deficit amounted to EUR 290 million, making it possible for the level of deficit to be brought down to approximately EUR 1.9 billion;

− plastics and plastic products, where the deficit has been reduced by EUR 260 million to an amount of nearly EUR 2.1 billion; and

− cautchouc and cautchouc products, with respect to which the surplus has increased by approximately EUR 245 million, attaining the level of EUR 1,1 billion.

In 2013, ¾ of the aggregate Polish export of chemical industry products were sold on the markets within the European Union (EUR 16.5 billion); concurrently, it was also with respect to the trade with these markets that the biggest trade deficit was recorded (EUR 5 billion); however, compared to the level from last year, the deficit has still been reduced by EUR 465 million. A negative balance in the trade in chemicals has also occurred with respect to the trade with non-EU developed markets (attaining the value of nearly EUR 1 billion) and the trade with developing markets (excluding the CIS), where the deficit attained the level of nearly EUR 1.4 billion. On the other hand, with respect to the trade with CIS countries (the share of which in our export of chemicals amounting to 13.3%, i.e. EUR 2.9 billion), a trade surplus in the amount of over EUR 1.6 billion has been recorded, having increased by approximately EUR 250 million compared to the previous year.

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For many years, electromechanical industry products remained the dominant group in the Polish foreign trade; in 2013, these products accounted for 39.3% of all exports and 36% of all imports. The export of these products increased by 8.9%, attaining the level of EUR 61 billion; it has therefore markedly picked up the pace compared to the growth recorded in 2012, when it increased by a mere 1.1%. There has been a dynamic increase in the export of ships, boats and floating structures – up by 31.3%, to the level of EUR 4.1 billion, which accounted for 2.6% of the total Polish exports. Within the electromechanical products group, the following categories have dominated Polish exports:

− boilers, machinery and mechanical appliances and parts thereof, the export of which increased by 8.2%, reaching the level of EUR 19.5 billion (i.e. 12.6% of all Polish exports);

− electrical machinery and appliances and parts thereof – exports have increased by 6.7%, attaining the value of nearly EUR 17.1 billion (i.e. 11% of all exports); and

− non-rail vehicles, parts and accessories thereof – the export thereof grew by 3.3%, attaining the level of EUR 16.6 billion – 10.7% of all exports.

The import of electromechanical products increased by 5.4% during that time, attaining the level of approximately EUR 56.6 billion. The most rapid growth – much like in the case of exports – was recorded with respect to ships, boats and floating structures – up by 33.8%, to the level of more than EUR 3.3 billion (i.e. 2.1% of all imports). The following categories of goods have dominated the imports of electromechanical products:

− boilers, machinery and mechanical appliances and parts thereof, the import of which increased by 3.1%, reaching the level of EUR 19.2 billion (i.e. 12.2% of all imports);

− electrical machinery and appliances and parts thereof, the import of which increased by 7.2%, reaching the level of EUR 17.2 billion (i.e. 11% of all imports); and

− non-rail vehicles, parts and accessories thereof, the import of which attained the value of EUR 12.3 billion (i.e. 7.9% of all imports into Poland), which was 4.9% higher than in the previous year.

The results attained in terms of the trade in electromechanical products have translated into a significant increase of trade surplus, which rose by nearly EUR 2.1 billion, attaining the level of almost EUR 4.4 billion, which has mostly been the consequence of the improvement in terms of trade balance with respect to:

− boilers, machinery and mechanical appliances and parts thereof – the deficit in the amount of approximately EUR 550 million has been transformed into a surplus in the amount of approximately EUR 360 million;

− aircraft, spacecraft and parts thereof – an improvement of trade balance by approximately EUR 575 million; and

− optical equipment, tools, apparatuses, photo cameras, measuring and medical equipment and parts thereof, with respect to which the deficit has been reduced by EUR 520 million to an amount of nearly EUR 1.5 billion.

The European Union countries are the recipients of more than 70% of all export of electromechanical products from Poland. In 2013, the value of the exports in question amounted to EUR 43 billion. The export of this commodity group to the remaining market groups were as follows: non-EU developed countries – 9.7%, CIS – 9%, other developing markets – 10.7%. The geographic structure of the import of products within this branch of industry took on a different shape. EU Member States accounted for 58% of the import of the goods in question (EUR 32.9 billion); non-EU developed markets accounted for 10.9%, while developing countries other than CIS countries accounted for 30.5% of the imports of electromechanical products into Poland (i.e. EUR 17.2 billion). This also had an influence on the structure of trade balance, where the surplus in the trade with the EU (EUR 10.2 billion) and with CIS countries (nearly EUR 5.2 billion) more than compensated for the high level of deficit recorded in the


63

trade with other developing markets (EUR 10.7 billion). This has traditionally been the consequence of a profound trade deficit with respect to electromechanical products which occurred in the trade exchange with countries of the Far East, including China (with the deficit amounting to nearly EUR 8.5 billion in 2013), South Korea (EUR 2 billion) and Taiwan (approximately EUR 570 million). In 2013, the growth of the export of wood and paper industry products as well as light industry products has also exceeded the average growth values, with the above categories of exports accounting for 4.6% and 3.6% of all Polish exports respectively. The exports in the former group attained the level of EUR 7.1 billion, i.e. 9.8% higher than in 2012, which was mostly the result of a dynamic increase in the export of wood, wood products and charcoal, which rose by 13.4%, attaining the level of EUR 3.1 billion (i.e. 2% of all Polish exports). The import of wood and paper industry products, on the other hand, increased by 4% and attained the level of EUR 5.3 billion, i.e. 3.4% of all imports. This has translated into an increase of the trade surplus within this group by EUR 435 million, to the level of EUR 1.8 billion. Meanwhile, the export of light industry products has increased by 10.9%, attaining the level of EUR 5.6 billion, which has mostly been the result of an increase in the exports in the main categories within this group, i.e.:

− clothes and clothing accessories, other than of knitted fabrics, the export of which increased by 9.7%, attaining the level of nearly EUR 1.7 billion (1.1% of all exports);

− clothes and clothing accessories of knitted fabrics – the export thereof amounted to nearly EUR 1.3 billion (0.8% of all exports), exceeding the results attained in the previous year by 8.9% and

− footwear, gaiters and similar products and parts thereof – the export of the goods in question increased by 24.2%, attaining the level of EUR 725 million.

The import growth with respect to light industry products (up by 5.2%, attaining the level of EUR 7.6 billion) has been more than two times less dynamic than the growth of exports, which has translated into a reduction of deficit with respect to this group (down by approximately EUR 180 million, to the level of EUR 2 billion). The export of metallurgical products, which account for 11% of all Polish exports (taking the fourth position in the Polish foreign trade in terms of value), attained the value of EUR 16.9 billion, rising by a mere 0.8% compared to the previous year. The following categories have dominated the export of the goods from this group:

− cast iron and steel products, the export of which rose by 2.6%, reaching the level of nearly EUR 5.2 billion (i.e. 3.3% of all exports);

− iron, cast iron and steel, the export of which amounted to nearly EUR 3.7 billion (i.e. 2.4% of all exports), 9.8% less than in the previous year; and

− copper and copper products, the export of which decreased by 2.7% during that time, attaining the level of approximately EUR 3.5 billion (i.e. a 2.2% share in all exports).

The import of metallurgical products increased at a pace similar to that of exports, rising by 0.7%, to the level of EUR 16.3 billion. Imports within this group are dominated by iron, cast iron and steel, the import of which has fallen by 3.4% (down to EUR 5.8 billion). This decrease, however, has been compensated for by the growth with respect to the remaining primary categories, i.e. cast iron and steel products (a 1% increase, to the level of EUR 3.7 billion) as well as aluminium and aluminium products (a 6% increase, to the level of EUR 2.7 billion). The trade surplus with respect to the metallurgical products group in 2013 amounted to EUR 650 million and was barely EUR 27 million higher than in 2012. The most significant positive trade balance was

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recorded with respect to the trade in copper and copper products (EUR 2.1 billion) as well as cast iron and steel products (EUR 1.4 billion). The Polish trade in metallurgical products is dominated by EU exports, the contribution of which towards total exports of such products in 2013 amounted to 78.3% (nearly EUR 13.3 billion), while the contribution towards imports amounted to 76.1% (EUR 12.4 billion). The second most significant group with respect to the trade in metallurgical products were developing markets other than CIS countries, which accounted for 9% of all Polish exports of such products (EUR 1.5 billion) and 11.8% of all imports thereof (EUR 1.9 billion). The most significant surplus in the trade in such products was recorded with respect to the European Union (approximately EUR 880 million), whereas the most substantial deficit was recorded with respect to the trade with developing markets other than CIS (approximately EUR 400 million). Favourable changes with respect to the balancing of our foreign trade have taken place in the trade in mineral products, where the deficit has been reduced by nearly EUR 2.5 billion to a level of nearly EUR 12 billion. This has been the consequence of a decline in the value of import of such products by 10.5% (to a level of approximately EUR 19.5 billion), which, in turn, resulted from the aforementioned decrease in the prices of energy raw materials. The export of mineral products in 2013 rose by 2.6%; however, in absolute terms the value thereof reached the level of EUR 7.5 billion – 2.6 times lower than the import of such products. While more than ¾ of the export of mineral products from Poland is earmarked for EU markets (EUR 5.8 billion in 2013), in terms of imports this sector has traditionally been dominated by members of the Commonwealth of Independent States, with 78% of the import of such goods originating from the countries in question in 2013. At the same time, the trade exchange with CIS countries generates a substantial trade deficit which has attained the level of nearly EUR 14.6 billion, even though it has been reduced by EUR 2 billion as a result of a decrease in the value of imports compared to the levels recorded in the previous year. Chart 9 Commodity structure of Polish exports in 2013, compared to 2012 and 2009 (in %)

0 5 10 15 20 25 30 35 40 45

Leather goods

Ceramic products



Mineral products

Miscellaneous and unclassified goods

Metallurgical products

Agricultural and food products

Chemical industry products

Electromechanical industry products

%

2009 2012 2013


In 2013, a decline in exports was recorded with respect to only one out of ten commodity groups (aggregated by convention), namely with respect to ceramic products (accounting for 2.6% of total exports); the export of the products in question fell by 8.6% to a level of approximately EUR 4 billion.


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The decline in imports in this group has been slightly less pronounced – imports fell by 2.6% to the level of EUR 2 billion, which resulted in a decrease of the trade surplus by EUR 325 million to a level of about EUR 2 billion. In 2013, the export of furniture, which holds one of the top spots in terms of Polish exports (with a 4.3% share in total exports) increased by 8.3%, attaining the value of over EUR 6.7 billion. It is worth noting that Poland continues to attain a substantial trade surplus with respect to the trade in the products in question, amounting to EUR 5.7 billion in 2013 – EUR 440 million more than in the previous year.

Chart 10 Commodity structure of Polish imports in 2013, compared to 2012 and 2009 (in %)

0 5 10 15 20 25 30 35 40

Leather goods

Ceramic products

Wood and paper products



Argicultural and food products


Mineral products



%

2009 2012 2013


Car parts and accessories as well as passenger cars have attained the top position on the list of goods which dominate Polish exports (aggregated at the level of 4-digit CN codes) for another year in a row, accounting for 8% of total exports. However, while the export of parts and accessories increased in 2013 by 9.9% (attaining the level of nearly EUR 7.3 billion), the export of passenger cars attained the value of nearly EUR 5.2 billion – slightly lower than in the previous year (down by 1.9%). In 2013, there has been a total of 23 commodities items the value of the export of which has exceeded EUR 1 billion. Apart from passenger cars and parts and accessories thereof, other highly processed products such as engines, signal reception apparatuses for television, machines for automated data processing, wired telephony and telegraphy apparatuses, various boats and vehicles designed for the carriage of goods continue to play a significant role within this group. Other categories of products which had a significant contribution towards Polish export included furniture, pharmaceuticals, tobacco products, poultry meat and offal as well as certain metallurgical products and minerals (including copper and copper products, processed petroleum oils).

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Chart 11 Commodity structure of Polish foreign trade balance in 2013, compared to 2012 and 2009 (in EUR billion)

-16.0 -12.0 -8.0 -4.0 0.0 4.0 8.0

Argicultural and food products


Ceramic products



Leather goods




Mineral products

EUR bn

2009 2012 2013


Table 15 Commodity structure of Polish trade during 2012-2013 and its impact on the trade balance (in EUR million)

2013 2012 Change 2013/2012

Exports Imports Balance Exports Imports Balance Exports growth (+) decline (-)



I Live animals 6,643 4,312 2,331 5,835 3,640 2,195 808 -672 136 II Plant products 4,135 3,566 569 3,542 3,562 -20 593 -5 588 III Fats, oils 560 766 -206 413 830 -418 147 64 211 IV Prepared foodstuffs 9,090 5,668 3,421 8,104 5,526 2,578 986 -143 843

(I-IV) Agricultural and food products 20,427 14,313 6,115 17,893 13,557 4,336 2,534 -755 1,779 V Mineral products 7,515 19,463 -11,949 7,325 21,757 -14,432 190 2,293 2,483 VI Products of the chemical industry 10,779 15,549 -4,771 9,946 14,778 -4,832 832 -771 61 VII Plastics 11,123 12,094 -970 10,149 11,624 -1,475 974 -469 505

(VI-VII) Products of the chemical industry 21,902 27,643 -5,741 20,095 26,403 -6,307 1,806 -1,240 566 VIII Leathers and leather products 738 942 -205 555 851 -296 183 -91 92 IX Wood and wood products 3,138 1,139 2,000 2,769 1,154 1,615 369 15 384 X Wood pulp 3,976 4,165 -188 3,708 3,947 -239 268 -217 50

(IX-X) Wood and paper industry products 7,115 5,303 1,811 6,477 5,101 1,377 637 -203 435 XI Textiles and textile products 4,777 6,537 -1,761 4,380 6,262 -1,883 397 -275 122 XII Footwear, headgear 833 1,095 -263 677 995 -318 156 -101 55

(XI-XII) Light industry products 5,609 7,633 -2,023 5,056 7,257 -2,201 553 -376 177 XIII Products of stone, gypsum, cement … 2,943 1,696 1,247 2,678 1,725 953 265 29 294 XIV Pearls, metals and stones 1,084 335 749 1,728 360 1,368 -644 24 -619 (XIII-XIV) Ceramic products 4,027 2,031 1,996 4,406 2,085 2,321 -379 54 -325

XV Products of non-precious metals 16,941 16,290 651 16,804 16,180 624 137 -110 27 XVI Mechanical and electrical equipment 36,574 36,360 214 34,014 34,626 -612 2,560 -1,734 826 XVII Vehicles 22,567 16,845 5,722 20,441 15,437 5,004 2,125 -1,408 718 XVIII Optical devices and apparatuses, etc. 1,818 3,365 -1,546 1,538 3,598 -2,060 281 233 514 (XVI-XVIII) Products of the electromechanical industry 60,959 56,570 4,389 55,993 53,661 2,332 4,966 -2,909 2,057 XIX Weapons and ammunition 32 84 -52 21 153 -132 10 69 79 XX Various products 9,534 2,872 6,663 8,703 2,714 5,988 832 -157 674 XXI Works of art 13 18 -5 26 12 13 -13 -6 -18 (XIX-XXI) Miscellaneous 9,579 2,974 6,605 8,749 2,880 5,870 830 -94 735

XXII Other 183 3,804 -3,621 102 4,292 -4,190 81 488 569 TOTAL 154,994 156,978 -1,984 143,456 154,040 -10,584 11,538 -2,938 8,600


Table 16 Changes in Polish foreign trade per commodity groups, sections and subsections as well as their impact on the trade balance (in EUR million)

2013 2012 Change 2013/2012 Group/section/subsection




Total 154,994 156,978 -1,984 143,456 154,040 -10,584 11,538 -2,938 8,600

I LIVE ANIMALS, ANIMAL PRODUCTS 6,643 4,312 2,331 5,835 3,640 2,195 808 -672 136 1 Live animals 187 610 -423 204 443 -238 -17 -168 -185 2 Meat and edible variety meats 3,366 1,429 1,937 3,022 1,367 1,655 344 -61 283

3 Fish and crustaceans, mollusks and other water invertebrates

968 1,342 -374 779 1,089 -310 190 -253 -63

4 Dairy products, eggs, natural honey 1,903 728 1,175 1,648 534 1,114 255 -194 60 5 Animal products n.e.c. 219 203 16 182 207 -25 37 4 41 II PLANT PRODUCTS 4,135 3,566 569 3,542 3,562 -20 593 -5 588 6 Live trees and other plants; bulbs … 141 257 -116 119 233 -115 22 -24 -2 7 Vegetables, certain edible roots and bulbs 952 571 381 864 468 396 88 -103 -15

8 Fruit and edible nuts, zests and skins of citrus fruits or melons

1,161 1,176 -15 1,064 1,033 31 97 -143 -46

9 Coffee, tea, Paraguay tea and spices 423 491 -68 430 564 -134 -7 73 66 10 Cereals 841 338 503 677 422 255 164 83 248

11 Products of the milling industry; malt; starch; inulin; wheat gluten

175 171 4 159 195 -37 16 24 40

12 Seeds of oil-bearing fruit .. 426 398 28 215 500 -285 211 102 313

13 Shellac; rubbers; resins and other plant juices and extracts

13 83 -70 12 75 -63 1 -8 -7

14 Plant materials for weaving … 3 80 -77 2 70 -68 1 -10 -9

III PLANT AND ANIMAL FATS AND OILS; PRODUCTS OF THEIR PROCESSING

560 766 -206 413 830 -418 147 64 211

15 Animal fats and oils … 560 766 -206 413 830 -418 147 64 211

IV PREPARED FOODSTUFFS; NON-ALCOHOLIC AND ALCOHOLIC BEVERAGES , VINEGAR; TOBACCO

9,090 5,668 3,421 8,104 5,526 2,578 986 -143 843

16 Processed meat, fish, crustaceans, mollusks and other water invertebrates

1,059 226 833 955 208 748 104 -18 86

17 Sugar and sugar products 591 405 185 623 443 179 -32 38 6 18 Cocoa and cocoa products 1,130 692 438 931 628 303 199 -64 135

19 Products of cereals, flour, starch or milk; confectionery products

1,157 586 570 985 522 463 172 -64 107

20 Processed vegetables, fruit, nuts or other plant parts 1,106 579 527 1,041 536 505 66 -43 22 21 Various prepared foodstuffs 1,291 781 510 1,108 752 356 182 -28 154 22 Non-alcoholic and alcoholic beverages , vinegar 562 610 -48 471 569 -97 90 -41 49





23 Remains and waste of the food industry; ready fodder for animals

661 1,315 -654 532 1,404 -872 128 89 218

24 Tobacco and processed tobacco substitutes 1,534 475 1,059 1,458 464 993 76 -10 66

(I-IV) Agricultural and food products 20,427 14,313 6,115 17,893 13,557 4,336 2,534 -755 1,779

V MINERAL PRODUCTS 7,515 19,463 -11,949 7,325 21,757 -14,432 190 2,293 2,483

25 Salt; sulfur; soil and stones; gypsum materials; lime and cement

237 513 -276 236 650 -414 2 136 138

26 Metal ores; slag and ash 45 850 -804 44 736 -691 1 -114 -113

27 Mineral fuels, mineral oils and products of their distillation; bitumen substances; mineral waxes

7,232 18,100 -10,868 7,045 20,371 -13,327 187 2,271 2,458

(V) Mineral products 7,515 19,463 -11,949 7,325 21,757 -14,432 190 2,293 2,483

VI PRODUCTS OF THE CHEMICAL INDUSTRY AND RELATED INDUSTRIES

10,779 15,549 -4,771 9,946 14,778 -4,832 832 -771 61

28 Inorganic chemicals; organic or inorganic compounds of precious metals …

757 1,006 -249 700 959 -259 57 -47 10

29 Organic chemicals 1,358 2,893 -1,534 1,481 2,727 -1,247 -122 -165 -288 30 Pharmaceutical products 2,374 4,292 -1,919 1,888 4,096 -2,208 486 -196 290 31 Fertilizers 589 687 -98 698 619 79 -109 -69 -177

32 Tanning agents, dyes, pigments, paints, lacquers, putty, sealants, inks ..

708 1,325 -617 640 1,287 -646 67 -38 29

33 Essential oils, resinoids; perfumes, cosmetics and toiletries

2,163 1,578 585 2,063 1,555 507 100 -22 78

34 Soaps and laundry products … 1,444 838 607 1,278 781 497 166 -57 109

35 Protein substances; modified starches; glues, enzymes …

185 522 -337 168 533 -365 18 11 28

36 Explosives; pyrotechnical and flammable materials; matches …

40 33 7 38 31 7 1 -2 0

37 Photographic and cinematographic materials 27 102 -76 29 98 -70 -2 -4 -6 38 Various chemical products 1,134 2,273 -1,139 964 2,091 -1,127 170 -182 -12

VII PLASTICS AND PLASTIC PRODUCTS CAUTCHOUC AND CAUTCHOUC PRODUCTS

11,123 12,094 -970 10,149 11,624 -1,475 974 -469 505

39 Plastics and plastic products 7,124 9,203 -2,079 6,388 8,729 -2,341 736 -474 262 40 Cautchouc and cautchouc products 4,000 2,891 1,109 3,761 2,895 866 238 5 243

(VI-VII) Products of the chemical industry 21,902 27,643 -5,741 20,095 26,403 -6,307 1,806 -1,240 566

VIII LEATHERS AND LEATHER PRODUCTS 738 942 -205 555 851 -296 183 -91 92 41 Untanned leathers (with the exception of furs), and 227 443 -215 212 424 -211 15 -19 -4





tanned leathers

42 Leather products … 224 440 -216 191 375 -184 33 -65 -32 43 Furs and artificial furs, and their products 286 60 227 151 52 99 135 -8 128

(VIII) Leathers and leather goods 738 942 -205 555 851 -296 183 -91 92

IX WOOD AND WOOD PRODUCTS 3,138 1,139 2,000 2,769 1,154 1,615 369 15 384 44 Wood and wood products; charcoal 3,103 1,111 1,993 2,736 1,125 1,610 367 15 382 45 Cork and cork products 6 9 -3 6 9 -4 0 0 0

46 Goods made of straw, esparto etc.; basketry products and wicker goods

30 19 11 28 19 9 2 0 2

X WOOD PULP OR PULP OF OTHER FIBROUS PLANTS 3,976 4,165 -188 3,708 3,947 -239 268 -217 50 47 Wood pulp 128 494 -365 88 430 -343 40 -63 -23

48 Paper, cardboard, products of paper mass, paper and cardboard

3,166 3,441 -275 3,002 3,285 -283 165 -157 8

49 Books, newspapers, pictures, manuscripts … 682 230 452 619 232 387 63 2 65

(IX-X) Products of the wood and paper industry 7,115 5,303 1,811 6,477 5,101 1,377 637 -203 435

XI TEXTILES AND TEXTILE PRODUCTS 4,777 6,537 -1,761 4,380 6,262 -1,883 397 -275 122 50 Silk 1 8 -7 0 6 -6 0 -1 -1 51 Wool, thin or thick animal hair … 97 147 -50 111 159 -48 -14 12 -2 52 Cotton 42 374 -332 38 375 -338 4 1 6 53 Other plant textile products 22 24 -2 19 18 1 3 -6 -3 54 Continuous chemical fibers 168 541 -374 167 500 -334 1 -41 -40 55 Cut chemical fibers 72 419 -347 68 412 -344 4 -7 -3

56 Cotton wool, felt and unwoven fabrics; special fibers …

240 472 -231 199 453 -253 41 -19 22

57 Carpets and other textile floor carpeting 186 192 -6 175 186 -10 11 -7 4 58 Special textiles, notions, embroidery … 46 175 -129 51 172 -121 -5 -3 -8 59 Impregnated fabrics … 218 455 -237 180 446 -266 38 -10 29 60 Knitted fabrics 84 186 -102 74 175 -101 10 -11 -1 61 Clothes and clothing accessories of knitted fabrics 1,257 1,416 -159 1,154 1,362 -207 103 -54 49

62 Clothes and clothing accessories, other than of knitted fabrics

1,657 1,534 123 1,510 1,486 24 147 -48 99

63 Other packaged textile products; sets; used clothes; rags

686 593 93 634 512 121 52 -81 -28

XII FOOTWEAR, HEADGEAR, UMBRELLAS … 833 1,095 -263 677 995 -318 156 -101 55 64 Footwear, gaiters and similar products, parts thereof 723 971 -247 582 868 -286 141 -102 39 65 Headgear and parts thereof 77 63 14 69 59 11 8 -4 4





66 Umbrellas, sun umbrellas, walking sticks, walking sticks with seats, whips, horsewhips and parts thereof

24 18 6 17 22 -5 7 4 11

67 Prepared feathers and down, products of feathers and down …

8 44 -36 8 45 -37 1 1 1

(XI-XII) Light industry products 5,609 7,633 -2,023 5,056 7,257 -2,201 553 -376 177

XIII PRODUCTS OF STONE, GYPSUM … 2,943 1,696 1,247 2,678 1,725 953 265 29 294

68 Products of stone, gypsum, cement, asbestos, mica and similar materials

775 449 326 739 453 287 35 4 39

69 Ceramic products 854 403 452 779 411 368 75 8 83 70 Glass and glass products 1,314 844 470 1,159 861 298 154 18 172

XIV PEARLS; PRECIOUS AND SEMI-PRECIOUS METALS AND STONES; COSTUME JEWELRY

1,084 335 749 1,728 360 1,368 -644 24 -619

71 Pearls; precious and semi-precious stones, precious metals

1,084 335 749 1,728 360 1,368 -644 24 -619

(XIII-XIV) Ceramic products 4,027 2,031 1,996 4,406 2,085 2,321 -379 54 -325

XV BASE METALS AND PRODUCTS THEREOF 16,941 16,290 651 16,804 16,180 624 137 -110 27 72 Iron, cast iron and steel 3,682 5,826 -2,144 4,080 6,031 -1,951 -398 205 -193 73 Products of cast iron and steel 5,158 3,747 1,411 5,028 3,710 1,318 130 -37 93 74 Copper and copper products 3,452 1,338 2,114 3,547 1,402 2,145 -95 64 -31 75 Nickel and nickel products 77 127 -50 50 127 -77 27 0 27 76 Aluminum and aluminum products 1,865 2,699 -834 1,676 2,546 -871 189 -152 37 78 Lead and lead products 133 108 25 124 92 31 10 -16 -6 79 Zinc and zinc products 255 154 101 218 152 66 37 -2 35 80 Tin and tin products 65 67 -2 51 63 -12 14 -4 10 81 Other base metals, ceramic metals, products thereof 31 68 -37 33 61 -28 -2 -6 -8

82 Tools, instruments, knives, spoons, forks etc. cutlery of base metals .

1,178 954 225 1,039 852 187 139 -102 38

83 Various products of base metals 1,044 1,202 -158 958 1,143 -184 86 -59 27

(XV) Metallurgical products 16,941 16,290 651 16,804 16,180 624 137 -110 27

XVI MECHANICAL AND ELECTRICAL EQUIPMENT 36,574 36,360 214 34,014 34,626 -612 2,560 -1,734 826

84 Nuclear reactors, boilers, machinery and mechanical equipment and parts thereof

19,512 19,155 356 18,026 18,573 -547 1,486 -582 903

85 Electrical machines and equipment 17,062 17,205 -143 15,988 16,053 -65 1,074 -1,152 -78 XVII VEHICLES, AIRCRAFT, VESSELS … 22,567 16,845 5,722 20,441 15,437 5,004 2,125 -1,408 718 86 Locomotives, rolling stock; track equipment; 749 316 433 644 263 381 105 -53 52





signaling devices

87 Non-rail vehicles, parts and accessories 16,639 12,330 4,309 16,104 11,750 4,354 535 -580 -45 88 Aircraft, space craft and their parts 1,073 863 210 566 930 -364 507 67 574 89 Vessels, boats and floating constructions 4,105 3,336 769 3,127 2,494 633 979 -842 137 XVIII OPTICAL EQUIPMENT AND APPARATUSES 1,818 3,365 -1,546 1,538 3,598 -2,060 281 233 514

90 Optical equipment, tools, apparatuses, photo cameras, measuring and medical equipment, parts thereof

1,780 3,231 -1,451 1,498 3,471 -1,973 282 240 522

91 Clocks and watches, and parts thereof 23 97 -74 25 93 -68 -2 -4 -6 92 Musical instruments, parts and accessories 15 36 -21 15 34 -19 1 -3 -2

(XVI-XVIII) Electromechanical products 60,959 56,570 4,389 55,993 53,661 2,332 4,966 -2,909 2,057

XIX WEAPONS AND AMMUNITION; PARTS AND ACCESSORIES

32 84 -52 21 153 -132 10 69 79

93 Weapons and ammunition, parts and accessories 32 84 -52 21 153 -132 10 69 79 XX VARIOUS PRODUCTS 9,534 2,872 6,663 8,703 2,714 5,988 832 -157 674

94 Furniture, bedclothes, mattresses etc., lamps, light advertising etc.

8,057 1,611 6,446 7,375 1,557 5,819 682 -54 627

95 Toys, games, sports goods, parts and accessories 396 804 -409 351 753 -402 45 -51 -6 96 Various manufactured products 1,082 456 625 977 405 572 105 -52 54 XXI WORKS OF ART., COLLECTIBLES 13 18 -5 26 12 13 -13 -6 -18 97 Works of art, collectibles and antiques 13 18 -5 26 12 13 -13 -6 -18 XXII OTHER 183 3,804 -3,621 102 4,292 -4,190 81 488 569 98 Special classification – deliveries 0 64 -64 0 35 -35 0 -29 -29 99 Special commercial transactions 183 3,740 -3,558 102 4,258 -4,156 81 517 598



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6 DESIGNATION OF IMPORTED GOODS In 2013, traditionally the largest share of imported goods in terms of their designation were goods designated for intermediate consumption, however its share in total imports decreased by 1.8 p.p., to the level of 63.6%. Slightly increase was observed in share of investment goods, to 15.9%. As a result the share of pro-development imports (i.e. investment and supplies imports), which was 79.5%, decreased by 1 p.p. comparing to 2012. The third major category of imports designation is consumption goods, the share of which in total imports was 20.5% comparing to 19.5% in the year before. Chart 12 Structure of imports distribution in the years 2011-2013 (share in %)

15.1

65.3

19.6

15.1

65.4

19.5

15.9

63.6

20.5

0 10 20 30 40 50 60 70

Investment goods

Intermediate consumption

Consumption goods

%2011 2012 2013


In 2013 the fastest increase in imports was recorded for consumption goods – by 7.4%. It was mainly the consequence of dynamic growth of primary foods and beverages designated mainly for households (by 22%), which share in consumption goods imports to Poland was 8.6%. A high pace of growth was also observed for durable consumer goods (by 9.9%), processed foods and beverages designated mainly for households (by 7.3%) and semi-durable consumer goods (by 7.3%). Relatively slow growth was in the dominant in this category, non-durable consumer goods – by 4.5%, which share was 26.7%. Significantly faster than total imports in 2013 rose imports of investment goods (by 6.7%). In this group the fastest growth was recorded in imports of industrial means of transport (by 20.9%), representing 25.7% of this category, while imports of other capital goods rose by 2.6%. Imports of goods designated for intermediate consumption decreased in 2013 by 0.8%, which was mainly a result of decline in imports primary fuels and lubricants (by 10.6%), which represented 18.3% of this category imports. A slight increase was noted in the dominant group in this category, i.e. processed industrial supplies – by 2.3% and parts and accessories for investment goods (excluding parts and accessories for means of transport) – by 3.4%, which share in this category were respectively

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46.9% and 14.6%. On the other hand, the high pace of growth was recorded in imports of parts and accessories for means of transport (by 7.4%).


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7 SERVICES IN POLISH FOREIGN TRADE Ever since the beginning of the transformation period, the trade in services has played an important role in Polish foreign trade, and its positive balance over this period has reduced the scale of deficit in merchandise trade. From the year 2004, when the surplus in services trade attained an exceptionally low level (EUR 28 million), it has been rising systematically, attaining a level of over EUR 5.2 billion in 2013. Although revenues from export of services over the past few years do not grow as quickly as revenues from exports of goods, export of services is characterized by a significantly higher share of added value compared to exports of goods and, at the same time, a relatively higher contribution to GDP. An important positive feature of the export of services is its relatively significant impact on the activation of small and medium enterprises and, as a consequence, on the improvement of the situation on the labour market. In 2013, revenues from the export of services amounted to EUR 30.2 billion, rising by 2.4% compared to the previous year; it follows that their growth was slower than in the case of the export of goods. During that time, the import of services increased by a mere 0.4%, attaining the level of nearly EUR 25 billion, which has translated into an increase in trade surplus to a level of approximately EUR 0.6 billion. Chart 13 Polish foreign trade in goods and services in the years 2000-2013 (in EUR billion)

0

20

40

60

80

100

120

140

160

180EUR bn

exports in goods 39.0 46.5 49.3 53.8 65.8 77.6 93.4 105.9 120.9 101.8 125.0 140.2 148.5 156.0

imports in goods 52.3 55.1 57.0 58.9 70.7 80.1 99.2 119.7 141.8 107.2 133.9 150.2 153.7 153.7

exports in services 11.3 10.9 10.5 9.9 10.8 13.1 16.4 21.0 24.2 20.7 24.7 27.0 29.5 30.2

imports in services 9.8 10.0 9.8 9.7 10.8 12.5 15.8 17.6 20.7 17.3 22.4 22.9 24.9 25.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


Since the growth of the foreign trade in services has generally been less dynamic than the growth of commodities exchange in recent years, the contribution of services towards the total foreign trade figures has been steadily decreasing. The contribution of services towards total export decreased from

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22.5% in 2000 to 16.6% in 2012 and 16.2% in 2013. The decline of the share of services in overall imports (down from 15.7% in 2000 to 14% in 2013) has been significantly slower than the decline of the share in exports.

7.1 Geographical structure of the Polish foreign trade in services

The dominant role in the Polish trade in services is played by EU markets, which in 2013 contributed as much as PLN 22.5 billion, i.e. approximately ¾ of total export revenues, and which accounted for nearly 78,7% of the total expenditure related to the import of services, i.e. more than PLN 19.6 billion. The export of services to EU Member States grew by 8.4% in 2013, whereas import increased by 1.1%. This has made it possible to increase the surplus in the trade in services with the EU more than twofold, to a level of over EUR 2.8 billion compared to approximately EUR 1.3 billion in 2012. As in the case of commodities exchange, Poland’s primary trading partner insofar as services are concerned is Germany, which accounted for 24% of the total Polish revenues from the export of services as well as 22.5% of the total expenditure related to the import of services. In 2013, the trade in services with the German market has experienced a decline – exports fell by 0.9%, to the level of EUR 7.2 billion, while imports decreased by 2.3% (down to EUR 5.6 billion). The surplus in the trade in services with Germany amounted to EUR 1.6 billion and was approximately EUR 70 million higher than in the previous year. Foreign travel and transport services accounted for the largest portion of revenues generated by the export of services to Germany (40.2% and 33.1% respectively, i.e. EUR 2.9 billion and EUR 2.4 billion respectively). The revenues generated by the export of construction services accounted for 4.6% of the total export revenues (EUR 335 million), even though the level thereof has decreased by 19.5% compared to the previous year. The contribution of IT and information services towards total services export amounted to 3.8%; the export of the services in question rose by 4.2%, attaining the level of approximately EUR 270 million). Insofar as other EU markets are concerned, the Czech Republic accounted for a substantial portion of Polish export revenues (6.1%) as well as import-related expenditures (5.1%). Revenues generated by exports to the Czech market increased by 25.6% in 2013, attaining the value of nearly EUR 1.9 billion, while import-related expenditure increased by 4.4% compared to the previous year, amounting to nearly EUR 1.3 billion. This has made it possible to increase the value of services trade surplus with the Czech Republic by approximately EUR 320 million, to the level of EUR 575 million. Foreign travel accounted for the most substantial part of all services exports in 2013 (34.2% share, i.e. approximately EUR 630 million); even though the revenues generated by the services in question have fallen by more than 15%. The second spot was taken by merchanting and other trade-related services, the contribution of which amounted to 32.7%; the export of these services generated revenues in the amount of EUR 605 million, compared to a mere EUR 14 million in the previous year. In addition, the export of transportation services accounts for approximately 15% (i.e. EUR 280 million) of all service export revenues. Among non-EU developed markets, Switzerland and the United States deserve a mention with respect to the trade in services. Whereas in 2012 the revenues from the export of services to the Swiss market constituted, in total, 6.7% of all service export revenues, in 2013 this share has decreased to the level of 2.5% as a result of the decline of the exports in question to a level of approximately EUR 745 million, compared to nearly EUR 2 billion in 2012. This change was caused by decline in the export of merchanting services as well as of other trade-related services. During that time, the import of services from Switzerland grew by 5.3%, attaining the level of approximately EUR 990 million. The results


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achieved have caused the trade surplus recorded in 2012 and amounting to nearly EUR 1.1 billion to be transformed into a trade deficit at the level of approximately EUR 240 million. Table 17 The geographical structure of the foreign trade in services in years 2012-2013 (in EUR million)

2012 2013 Share

EUR million Dynamics

Change of balance

2012 2013

exports 29,512 30,219 102.4 100.0 100.0

imports 24,870 24,970 100.4 100.0 100.0 Total

balance 4,642 5,249 607

exports 20,739 22,475 108.4 70.3 74.4

imports 19,443 19,653 101.1 78.2 78.7 EU,

including: balance 1,296 2,822 1,526

exports 15,262 15,357 100.6 51.7 50.8

imports 14,234 14,256 100.2 57.2 57.1 Euro Area

balance 1,028 1,101 73

exports 7,284 7,216 99.1 24.7 23.9

imports 5,747 5,613 97.7 23.1 22.5 Germany

balance 1,537 1,603 66

exports 1,473 1,850 125.6 5.0 6.1

imports 1,221 1,275 104.4 4.9 5.1 Czech

Republic balance 252 575 323

exports 789 701 88.8 2.7 2.3

imports 798 743 93.1 3.2 3.0 Slovakia

balance -9 -42 -33

exports 8,773 7,744 88.3 29.7 25.6

imports 5,427 5,317 98.0 21.8 21.3 Non-UE, including:

balance 3,346 2,427 -919

exports 1,989 746 37.5 6.7 2.5

imports 938 988 105.3 3.8 4.0 Switzerland

balance 1,051 -242 -1,293

exports 1,498 1,647 109.9 5.1 5.5

imports 1,435 1,341 93.4 5.8 5.4 USA

balance 63 306 243

exports 1,091 1,144 104.9 3.7 3.8

imports 509 524 102.9 2.0 2.1 Russia

balance 581 620 38

exports 1,332 1,423 106.8 4.5 4.7

imports 234 264 112.8 0.9 1.1 Ukraine

balance 1,098 1,159 61


The export of services to the United States, on the other hand, increased by 9.9%, attaining the level of more than EUR 1.6 billion, which accounted for 5.5% of the total revenues generated by the export of services. The import of services from the USA, on the other hand, was 6.6% lower than in the previous year, amounting to approximately EUR 1.3 billion. As a result, the positive balance of exchange with respect to the trade in services with the USA has increased by approximately EUR 245 million, attaining the level of over EUR 300 million. The most substantial portion of revenues from the export of services to the USA in 2013 was generated by the following types of services: transport services (21.7%, i.e. approximately EUR 360 million), IT and information services (17.6%, i.e. EUR 290 million), legal services in the field of accounting, management and public relations (15.7%, i.e. approximately EUR

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260 million), R&D services (12.5%, approximately EUR 205 million) as well as foreign travel (12.4%, i.e. approximately EUR 205 million). Among eastern markets, one should consider the position of the Ukraine and the Russian Federation in the Polish services trade. Revenues from the export of services to the Ukrainian market grew by 6.8%, exceeding the level of EUR 1.4 billion, while the import of services increased by 12.8%; however, its scale remains more than 5 times lower than the scale of export (approximately EUR 265 million). The trade surplus amounted to nearly EUR 1.2 billion and was approximately EUR 60 million higher than in the previous year. The contribution of the Ukrainian market towards the Polish services trade in 2013 amounted to 4.7% in terms of export and 1.1% in terms of import. Nearly 90% of the revenues from the export of services to the Ukrainian market was generated by foreign travel (nearly EUR 1.3 billion). Despite the potential of the Russian market, which is many times greater than that of the Ukrainian market, the Polish trade in services with the Russian Federation remains at a lower level. In 2013, however, there has been an above-average increase in the services trade with Russia, with export revenues rising by 4.9% compared to the previous year and attaining the level of nearly EUR 1.1 billion, while import-related expenses increased by 2.9%, to the level of EUR 0.5 billion. The surplus in the services trade with the Russian Federation amounted to EUR 620 million and was approximately EUR 40 million higher than in the previous year. Foreign travel and transport services accounted for the greatest part of export revenues (with a share of 46% and 37.4% respectively, i.e. EUR 525 million and approximately EUR 430 million respectively).

7.2 Subject matter structure of the Polish foreign trade in services

The most substantial portion of revenues from the export of services was generated by transport services and services provided to travellers from abroad (including tourists), the contribution of which towards the total export of services in 2013 amounted to 30.5% and 28.4% respectively. The export of transport services increased by 6%, i.e. at a markedly above-average pace, attaining the value of over EUR 9.2 billion. The expenditure related to imports in this category of services, on the other hand, amounted to approximately EUR 5.3 billion, 3.1% higher than in the previous year. With respect to the trade in transportation services, Poland has managed to attain a substantial surplus, which amounted to nearly EUR 3.9 billion in 2013, compared to EUR 3.2 billion in the previous year. Revenues from the export of services provided to travellers from abroad, on the other hand, attained the value of nearly EUR 8.6 billion, exceeding the revenues generated in the previous year by a mere 0.7%. The import growth with respect to the services in question was also negligible; imports grew by 0.4% and attained the level of almost EUR 6.9 billion. The surplus recorded with respect to the trade in the services in question amounted to over EUR 1.7 billion, i.e. approximately EUR 40 million more than in the previous year. Among other types of services, where the scale of trade is significantly lower and the trading dynamics is much more diverse, IT and information services accounted for the most substantial part of the trade volume, with a share of 7.4% with respect to export and 6.9% with respect to import. In 2013, export revenues increased by 18.2% (attaining the level of over EUR 2.2 billion), while the import of these services was 12.7% higher than in the previous year and amounted to approximately EUR 1.7 billion.


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These results made it possible to increase the surplus with respect to the trade in the services in question by approximately EUR 150 million, to a level of approximately EUR 500 million. Trade results with respect to patents and licenses also deserve a particular attention. Whereas the revenues from the export thereof increased by 33.7% in 2013, the scale thereof remains low (approximately EUR 240 million) compared to the import thereof, which increased by 12.4%, exceeding the level of EUR 2 billion. At the same time, the trade deficit with respect to patents and licenses has increased by approximately EUR 165 million, attaining the level of EUR 1.8 billion. The export revenues pertaining to these services remain relatively low when compared to the expenditure related to the import thereof (more than 8 times higher); this proves that the level of innovativeness and creativity of the Polish economy remains quite underwhelming. A high level of deficit is also generated with respect to the trade in insurance and financial services. In 2013, a negative balance at the level of approximately EUR 400 million was recorded with respect to the trade in insurance services, increasing twofold compared to the previous year. This was a consequence of a rapid growth of expenditure related to the import of the services in question (up by 15.7%, to a level of approximately EUR 560 million), combined with a decline in export revenues (down by approximately 45%, to a level of approximately EUR 155 million). By contrast, the situation in the trade in financial services developed in the opposite direction; export rose by 8.9% (attaining the level of approximately EUR 380 million), while import fell by 12.7%, attaining the level of approximately EUR 505 million), which made it possible to curb the trade deficit by over EUR 100 million, down to a level of approximately EUR 120 million. The so-called other services account for 25% of the Polish services trade; these services, accounting for nearly EUR 7.6 billion in export and approximately EUR 6.2 billion in import, encompass a wide range of various types of services which include, inter alia:

− legal services, accountancy services, management and public relations consulting, which accounted for 8% of the total export revenues and 11.6% of the total import-related expenditure in 2013. The export of these services increased by over 30% (attaining the level of EUR 2.4 billion), while the import thereof surged at an even faster pace, growing by 43.5% to the level of nearly EUR 2.9 billion; as a result, the deficit with respect to this category of services has increased by approximately EUR 315 million, attaining the level of EUR 460 million;

− advertising, market research and public polls – with a share of 4.9% in export and 2.4% in import. The revenues from the export of the services in question grew by 3.6%, attaining the level of almost EUR 1.5 billion, while the import thereof rose at an even more rapid pace, increasing by 10.7%, although the scale thereof remained nearly 3 times lower than the scale of export (approximately EUR 0.6 billion). With respect to the trade in these services Poland has managed to generate a surplus which has remained at the level of approximately EUR 890 million in the last two years;

− architectural, engineering and other technical services, with respect to which the export revenues increased by 12.8%, attaining the level of approximately EUR 950 million, coupled with an increase in import-related expenses by 9.4%, to a level of approximately EUR 815 million, as a result the surplus achieved EUR 140 million, i.e. nearly EUR 40 million more than in the previous year. These services accounted for 3.2% of the total Polish services export and 3.3% of the total Polish services import;

− merchanting and other trade-related services, which accounted for 2.6% of the total services export revenues and 2.4% of the total expenses related to the import of services. The export of the services in question in 2013 increased by 41.5%, attaining the level of approximately EUR 775 million, while the import thereof grew by a mere 1.2%, attaining the level of nearly EUR 590 million. The achieved results have made it possible to transform the trading deficit in the amount

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of EUR 34 million recorded in 2012 into a surplus in the amount of nearly EUR 190 million in 2013;

− R&D services, with respect to which export revenues increased by 4.3%, attaining the value of approximately EUR 585 million, while import surged by 24.2%, to the level of EUR 195 million; however, since the scale of import remains three times lower than the scale of export, the balance of exchange remains positive, having attained the level of nearly EUR 390 million in 2013.

The services trade surplus recorded during the last couple of years had a mitigating effect on the deficit recorded with respect to the Polish foreign trade and on the scale of deficit on the current account. The surplus in question has been increasing systematically from 2005 onwards (following an earlier period of decline), rising from the level of a mere EUR 28 million in 2004 to more than EUR 5.2 billion in 2013. As a result, the services trade balance indicator (measured as a relation of the balance to export revenues, expressed in percentages) has also seen a significant improvement. While in 2004 the value of this indicator was close to zero (indicating a state of balance), in 2013 it amounted to +17,4%.

Table 18 Poland's trade in services in the years 2012-2013 (in EUR million) – service type structure

2012 2013 Dynamics Share Symbol Type of services

exports imports balance exports imports balance exports imports exports imports

200 TOTAL 29,512 24,870 4,642 30,219 24,970 5,249 102.4 100.4 100.0 100.0 205 Transport services 8,689 5,489 3,200 9,214 5,320 3,894 106.0 96.9 30.5 21.3 236 Foreign travel 8,533 6,842 1,691 8,593 6,866 1,727 100.7 100.4 28.4 27.5 245 Postal and communications services 425 494 -69 410 517 -107 96.5 104.7 1.4 2.1 249 Construction services 1,233 630 603 1,151 603 548 93.3 95.7 3.8 2.4 253 Insurance services 282 483 -201 156 559 -403 55.3 115.7 0.5 2.2 260 Financial services 350 577 -227 381 504 -123 108.9 87.3 1.3 2.0 262 Computer and information services 1,880 1,524 356 2,222 1,718 504 118.2 112.7 7.4 6.9 266 Patents and licenses 178 1,811 -1,633 238 2,035 -1,797 133.7 112.4 0.8 8.1 268 Other services, including: 7,639 6,097 1,542 7,569 6,219 1,350 99.1 102.0 25.0 24.9 269 MERCHANTING AND OTHER TRADE-RELATED SERVICES 547 581 -34 774 588 186 141.5 101.2 2.6 2.4 272 OPERATIONAL LEASING 87 347 -260 99 452 -353 113.8 130.3 0.3 1.8

274 LEGAL, ACCOUNTING, MANAGEMENT CONSULTANCY AND PUBLIC RELATIONS SERVICES 1,869 2,016 -147 2,431 2,892 -461 130.1 143.5 8.0 11.6

278 ADVERTISING, MARKET RESEARCH AND PUBLIC OPINION POLLING 1,435 541 894 1,486 599 887 103.6 110.7 4.9 2.4

279 RESEARCH AND DEVELOPMENT SERVICES 559 157 402 583 195 388 104.3 124.2 1.9 0.8

280 ARCHITECTURAL, ENGINEERING AND OTHER TECHNICAL SERVICES 845 743 102 953 813 140 112.8 109.4 3.2 3.3

281 AGRICULTURAL, MINING AND ON-SITE PROCESSING SERVICES 626 76 550 229 110 119 36.6 144.7 0.8 0.4

284 OTHER BUSINESS SERVICES 1,277 780 497 1,014 570 444 79.4 73.1 3.4 2.3

285 SERVICES BETWEEN AFFILIATED ENTERPRISES (NOT INCLUDED ELSEWHERE) 394 856 -462 0 0 0 0.0 0.0 0.0 0.0

287 Cultural and recreational services 302 822 -520 285 530 -245 94.4 64.5 0.9 2.1 291 Government services 1 101 -100 0 99 -98 34.3 97.4 0.0 0.4



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8 FOREIGN TRADE IN THE FIRST HALF OF 2014 The export of goods in the first half of 2014 attained the value of EUR 80 billion and was 5.4% higher than in the corresponding period of the previous year. Import, on the other hand, attained the level of EUR 80.2, increasing by 4.5%. As a result, the trade balance has seen further improvement, with a reduction of the deficit by approximately EUR 640 million, down to about EUR 185 billion. Table 19 Poland’s trade in goods during the period from January 2013 to June 2014

Dynamics in % same period

of past year = 100 in EUR million

Period

Exports Imports Balance Exports Imports

January 2013 12,324 12,706 -383 112.1 105.0 February 12,320 12,212 108 111.3 98.8 March 12,707 13,543 -835 102.3 101.1 Q1 37,351 38,461 -1,110 108.3 101.6 April 13,143 12,831 313 112.2 101.2 May 12,413 12,677 -264 102.1 93.9 June 13,034 12,792 242 112.3 103.1 Q2 38,590 38,299 291 108.8 99.3 1st half of the year 75,941 76,760 -819 108.5 100.4 July 13,052 13,291 -239 110.1 105.5 August 12,366 12,470 -104 105.8 103.1 September 13,924 13,528 395 109.3 103.3 Q3 39,342 39,290 52 108.4 104.0 October 14,631 14,862 -230 103.9 104.1 November 13,603 13,984 -381 104.6 101.2 December 11,477 12,083 -605 113.3 103.0 Q4 39,712 40,928 -1,216 106.7 102.8 2013 154,994 156,978 -1,984 108.0 101.9 January 2014 13,219 13,239 -20 107.3 104.2 February 12,851 12,951 -100 104.3 106.1 March 13,922 14,013 -91 109.6 103.5 Q1 39,992 40,203 -211 107.1 104.5 April 13,772 13,541 231 104.8 105.5 May 13,297 13,648 -350 107.1 107.7 June 12,955 12,809 146 99.4 100.1 Q2 40,025 39,998 27 103.7 104.4 1st half of the year 80,017 80,201 -184 105.4 104.5


The monthly average value of Polish exports within the period between January and June 2014 attained the value of over EUR 13.3 billion, whereas in the entire year 2013 it amounted to approximately EUR 12.9 billion. The value of imports in the first half of 2014, on the other hand, amounted to approximately EUR 13.4 billion per month, has exceeded the average value for 2013, which amounted to nearly EUR 13.1 billion.

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Chart 14 Poland’s trade in goods during the period from January 2013 to June 2014

-4 000

0

4 000

8 000

12 000

16 000

EU

R m

illio

n

exports 12 324 12 320 12 707 13 143 12 413 13 034 13 052 12 366 13 924 14 631 13 603 11 477 13 219 12 851 13 922 13 772 13 297 12 955

imports 12 706 12 212 13 543 12 831 12 677 12 792 13 291 12 470 13 528 14 862 13 984 12 083 13 239 12 951 14 013 13 541 13 648 12 809

balance -383 108 -835 313 -264 242 -239 -104 395 -230 -381 -605 -20 -100 -91 231 -350 146

I II III IV V VI VII VIII IX X XI XII I II III IV V VI

2013 2014

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of CSO data. Chart 15 Monthly export and import dynamics during the period from January 2013 to June 2014 (yoy)

90.0

95.0

100.0

105.0

110.0

115.0

%

exports 112.1 111.3 102.3 112.2 102.1 112.3 110.1 105.8 109.3 103.9 104.6 113.3 107.3 104.3 109.6 104.8 107.1 99.4

imports 105.0 98.8 101.1 101.2 93.9 103.1 105.5 103.1 103.3 104.1 101.2 103.0 104.2 106.1 103.5 105.5 107.7 100.1

I II III IV V VI VII VIII IX X XI XII I II III IV V VI

2013 2014



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Table 20 Changes in the geographical structure of Polish foreign trade after the 1st half of 2014 and their impact on the balance of exchange (in EUR million)

1st half of 2014 1st half of 2013 Changes

Exports Imports Balance Exports Imports Balance




Poland, total 80,017 80,201 -184 75,941 76,760 -819 4,076 -3,441 635 previous year = 100 105.4 104.5 108.5 100.4 Developed countries 66,938 52,190 14,748 62,457 50,895 11,563 4,480 -1,295 3,185 previous year = 100 107.2 102.5 106.8 102.3 share

including: 83.7 65.1 82.2 66.3

EU 61,226 46,820 14,406 57,101 44,912 12,190 4,125 -1,908 2,217 previous year = 100 107.2 104.2 105.2 100.8 share

including: 76.5 58.4 75.2 58.5

Germany 20,725 17,342 3,383 19,053 16,559 2,494 1,672 -783 889 previous year = 100 108.8 104.7 106.1 100.3 share 25.9 21.6 25.1 21.6 United Kingdom 5,001 2,092 2,910 4,847 1,955 2,891 155 -136 18 previous year = 100 103.2 107.0 104.6 101.8 share 6.3 2.6 6.4 2.6 Czech Republic 4,845 2,738 2,107 4,673 2,826 1,847 171 88 260 previous year = 100 103.7 96.9 105.0 99.2 share 6.1 3.4 6.2 3.7 France 4,579 3,144 1,435 4,439 2,983 1,457 140 -162 -22 previous year = 100 103.1 105.4 101.9 98.0 share 5.7 3.9 5.9 3.9 Italy 3,718 4,239 -521 3,460 4,051 -591 258 -188 69 previous year = 100 107.4 104.7 95.1 98.3 share 4.6 5.3 4.6 5.3 Other developed countries

5,712 5,370 341 5,356 5,983 -627 355 613 968

previous year = 100 106.6 89.8 127.7 115.1 share

including: 7.1 6.7 7.1 7.8

USA 1,684 1,946 -263 1,666 2,167 -501 17 221 238 previous year = 100 101.0 89.8 126.0 117.3 share 2.1 2.4 2.2 2.8 EFTA 2,342 1,749 593 2,385 2,230 155 -43 481 438 previous year = 100 98.2 78.4 138.5 135.7 share 2.9 2.2 3.1 2.9 Other countries excluding developed economies

13,080 28,011 -14,932 13,483 25,865 -12,382 -404 -2,146 -2,550

previous year = 100 97.0 108.3 117.2 97.0

share including:

16.3 34.9 17.8 33.7

Countries of the CIS 6,323 11,211 -4,887 7,175 10,784 -3,608 -852 -427 -1,279 previous year = 100 88.1 104.0 112.5 86.8 share

including: 7.9 14.0 9.5 14.1

Russia 3,516 9,237 -5,721 3,936 9,469 -5,534 -420 232 -187 previous year = 100 89.3 97.5 112.6 87.7 share 4.4 11.5 5.2 12.3 Other countries 6,756 16,800 -10,044 6,308 15,082 -8,774 448 -1,719 -1,271 previous year = 100 107.1 111.4 113.1 106.0 share

including: 8.4 20.9 8.3 19.7

China 763 7,791 -7,028 765 6,872 -6,106 -2 -920 -922 previous year = 100 99.7 113.4 122.4 106.7 share 1.0 9.7 1.0 9.0


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For a number of years, exports to developing and less developed markets had a tendency to grow at a more rapid pace. In the first half of 2014, however, this trend was reversed. At the present stage, it is the trade exchange with developed markets which has led to better results, with exports rising by 7.2% to a level of over EUR 66.9 billion. Imports, on the other hand, amounted to nearly EUR 52.2 billion between January and June 2014 – 2.5% higher than in the previous year. These results have translated into an increase of the surplus with respect to the trade with this group of markets by nearly EUR 3.2 billion, so that in the end the surplus attained the level of over EUR 14.7 billion. Within the period referred to, sales to EU markets increased by 7.2%, exceeding the value of EUR 61.2 billion; exports to Eurozone countries increased by 8.5%, attaining the level of nearly EUR 42.8 billion, while exports to other EU markets rose by 4.3%, attaining the level of over EUR 18.4 billion. Imports from the EU amounted to EUR 46.8 billion – 4.2% higher than in the previous year. Import from the Eurozone countries increased by 4.6%, attaining the level of nearly EUR 36.8 billion, while imports from other EU markets rose by 2.8%, to the level of EUR 10 billion. The surplus in the trade with all EU markets grew by EUR 2.2 billion, attaining the level of EUR 14.4 billion; the surplus in trade with Eurozone countries increased by EUR 1.7 billion, attaining the level of EUR 6 billion, while the surplus in trade with other markets grew by EUR 0.5 billion, attaining the level of EUR 8.4 billion. The exports to our main trading partner – Germany – increased by 8.8%, attaining the level of more than EUR 20.7 billion. This increase in exports exceeded the average export growth value and, combined with an increase in imports by a 4.7%, made it possible to increase the existing trade surplus with respect to the market in question by approximately EUR 0.9 billion, to nearly EUR 3.4 billion. The export to the markets of our second and third most important trading partners, i.e. the United Kingdom and the Czech Republic, increased at a pace that was slightly slower than average in the first half of 2014. The exports to the British market was 3.2% higher than in the previous year (EUR 5 billion), while the exports to the Czech market grew by 3.7% (attaining the level of over EUR 4.8 billion). Nevertheless, in both cases there has been an increase of the positive trade balance, which increased by EUR 18 million (attaining the level of EUR 2.9 billion) and by EUR 260 million (attaining the level of EUR 2.1 billion) for the United Kingdom and the Czech Republic respectively. Among other EU countries, the dynamic increase of the export to markets such as Spain (up by 22.3%, to the level of nearly EUR 2 billion), Latvia (up by 21.5%, to a level of approximately EUR 730 million) and Finland (up by 23.8%, to the level of EUR 710 million) also deserves attention. Export to non-EU developed markets increased at a slightly slower pace than in the case of exports to EU markets, rising by 6.6% and attaining the level of EUR 5.7 billion. Within this group of countries, the most substantial part of al Polish exports is earmarked for Norway, where there has been a 3.4% decline in exports, to the level of over EUR 1.6 billion) and for the United States, where exports have increased by 1%, attaining the level of almost EUR 1.7 billion. At the same time, imports from those markets fell by 10.2% (to the level of nearly EUR 5.4 billion) within the period between January and June 2014; as a result, the trade deficit in the amount of approximately EUR 630 million recorded in the previous year has been transformed into a surplus in the amount of approximately EUR 340 million. The exports to the broadly defined group of developing and less developed countries, following a 11.2% increase recorded in 2013, fell by 3% in the first half of 2014 (down to nearly EUR 13.1 billion). This has been the consequence of a decline in exports to CIS markets (down by 11.9% to approximately EUR 6.3 billion), including, in particular, the Russian Federation (down by 10.7%, to the level of EUR 3.5 billion) and the Ukraine (down by 26.4%, to the level of nearly EUR 1.5 billion). Exports to the third most significant market among the CIS countries – Belarus – rose by 2% during that time, attaining the level of approximately EUR 830 million). During the period in question, import from the CIS rose by 4%


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(attaining the level of EUR 11.2 billion); imports from the Russian Federation decreased by 2.5%, while import from the Ukraine and Belarus grew by 17.2% and 22.5% respectively. The trade deficit with the entire Commonwealth of Independent States has increased by nearly EUR 1.3 billion, attaining the level of almost EUR 4.9 billion. Sales to developing markets other than CIS, on the other hand, attained the value of almost EUR 6.8 billion – 7.1% higher than in the previous year. However, due to a more rapid increase of the import from the countries in question (up by 11.4%, to the level of EUR 16.8 billion), the trade deficit has increased by nearly EUR 1.3 billion, attaining the level of EUR 10 billion. In this group of market, attention should be drawn to the dynamically increasing export to United Arab Emirates (up by 64%, to the level of EUR 430 million), Serbia (up by 21%, to the level of EUR 350 million), Algeria (a twofold increase, to the level of EUR 300 million) and Saudi Arabia (up by 45.5%, to a level of approximately EUR 230 million). With respect to the subject matter of the trade activities performed, the most substantial increase in exports was recorded with respect to electromechanical products (up by 6.9%, to the level of EUR 32 billion) as well as with respect to agricultural and food products (up by 6.3%, to the level of nearly EUR 10.3 billion). Within the electromechanical products group (which accounts for 40% of all exports and 35.6% of all imports) the biggest export increases were recorded with respect to boilers, machinery and mechanical appliances and parts thereof (up by 10.3%, to the level of over EUR 10.2 billion) as well as electrical machinery and appliances and parts thereof (up by 7.3% to the level of nearly EUR 8.7 billion), which accounted for 12.8% and 11.1% of all export in the first half of 2014 respectively. In addition, export has also increased with respect to the following categories:

− ships, boats and floating structures – up by 16.4%, reaching the level of nearly EUR 2.5 billion (i.e. 3.1% of total exports); and

− locomotives, rolling stock; track equipment; signalling devices – up by 13.1%, reaching the level of EUR 420 million, which accounted for 0.5% of all Polish exports.

The import of electromechanical products increased much slower during that time, rising by 3.5% and attaining the level of EUR 28.5 billion; as a result, the surplus in the trade of these goods increased by EUR 1.1 billion, attaining the level of nearly EUR 3.5 billion. The most significant improvement of trade balance was recorded with respect to the trade in boilers, machinery and mechanical appliances and parts thereof as well as electrical machinery and appliances and parts thereof, where the trade deficit recorded last year, amounting to EUR 90 million and EUR 10 million respectively, has been transformed into a trade surplus in the amount of EUR 705 million and EUR 320 million respectively. During the first half of 2014, agricultural and food products accounted for 12.8% of the total Polish exports. The export of prepared foodstuffs increased at the most rapid pace within this group (up by 6.9%, to the level of over EUR 4.6 billion), followed by animal products (up by 6.4%, to the level of nearly EUR 3.7 billion). The export of plant products, on the other hand, increased at a pace which was slightly below average (rising by 4.1% to the level of EUR 2 billion), which was, to a large extent, the consequence of a decline in exports of the main category of the exports in question, namely edible fruits and nuts, etc. – down by 11.5%, to a level of approximately EUR 580 million, which accounted for 0.7% of all exports.

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Table 21 Changes in the commodity structure of Polish foreign trade after the 1st half of 2014 and their impact on the balance of exchange (in EUR million)

1st half of 2014 1st half of 2013 Change

Section/commodity group Exports Imports Balance Exports Imports Balance




TOTAL 80,017 80,201 -184 75,941 76,760 -819 4,076 -3,441 635

I Live animals 3,368 2,179 1,188 3,164 1,976 1,188 204 -203 1

II Plant products 1,995 1,871 124 1,917 1,903 14 79 32 110

III Fats, oils 273 354 -80 241 363 -123 33 10 42

IV Prepared foodstuffs 4,625 2,847 1,779 4,329 2,755 1,573 297 -91 205

(I-IV) Agricultural and food products

10,262 7,251 3,011 9,650 6,998 2,652 612 -253 359

V Mineral products 3,547 9,533 -5,986 3,707 9,214 -5,508 -159 -319 -478

VI Products of the chemical industry

5,560 8,360 -2,800 5,280 7,830 -2,550 280 -529 -250

VII Plastics 5,612 6,178 -566 5,507 5,938 -431 105 -241 -135 (VI-VII)

Products of the chemical industry

11,172 14,538 -3,366 10,787 13,768 -2,981 385 -770 -385

VIII Leathers and leather products

557 534 23 429 458 -28 128 -76 51

IX Wood and wood products

1,747 654 1,092 1,610 557 1,052 137 -97 40

X Wood pulp 1,989 2,098 -109 1,971 2,037 -66 19 -61 -43

(IX-X) Wood and paper industry products

3,736 2,752 983 3,581 2,594 986 155 -158 -3

XI Textiles and textile products

2,594 3,528 -934 2,258 3,086 -828 336 -442 -107

XII Footwear, headgear 432 618 -185 403 536 -133 29 -82 -52 (XI-XII)


3,026 4,146 -1,120 2,661 3,621 -961 365 -524 -159

XIII Products of stone, gypsum, cement …

1,597 872 726 1,408 799 609 189 -72 117

XIV Pearls, metals and stones

446 143 303 518 167 350 -72 24 -48

(XIII-XIV)

Ceramic products 2,043 1,015 1,028 1,926 967 959 117 -48 69

XV Products of non-precious metals

8,478 8,644 -166 8,538 8,060 478 -60 -584 -644

XVI Mechanical and electrical equipment

19,114 18,088 1,026 17,556 17,656 -100 1,558 -432 1,126

XVII Vehicles 11,905 8,785 3,120 11,438 8,268 3,170 468 -517 -49

XVIII Optical devices and apparatuses, etc.

968 1,648 -681 923 1,639 -716 44 -9 35

(XVI-XVIII)

Products of the electromechanical industry

31,987 28,521 3,466 29,917 27,563 2,354 2,070 -958 1,112

XIX Weapons and ammunition

11 22 -11 10 19 -9 1 -3 -1

XX Various products 5,158 1,584 3,574 4,655 1,354 3,301 503 -230 272

XXI Works of art 9 10 -1 7 13 -6 2 3 4

XXII Other 32 1,648 -1,616 74 2,128 -2,054 -42 480 438


During that time, the agricultural and food import increased by 3.6% (attaining the level of over EUR 7.2 billion); the growth rate thereof was thus two times slower than the rate of export growth, resulting in an increase of the trade surplus with respect to this group of goods by approximately EUR 360 million, to the level of EUR 3 billion. The most substantial trade surplus was generated with respect to the trade in prepared foodstuffs (nearly EUR 1.6 billion) as well as in animal products (nearly EUR 1.2 billion). The export of the products of the chemical industry – the second-biggest group of goods in the Polish foreign trade in terms of turnover value (accounting for 14% of the Polish exports and 18.1% of imports)


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grew at a below-average pace, rising by 3.6% and attaining the level of nearly EUR 11.2 billion). The import of the goods in question during that time exceeded the level of EUR 14.5 billion – 5.6% higher than in the previous year. These results have caused the existing deficit with respect to this group of goods to increase slightly (up by EUR 385, to the level of nearly EUR 3.4 billion). The balance of exchange has also deteriorated with respect to the trade in mineral products, where imports grew by 3.5% (attaining the level of EUR 9.5 billion), while exports fell by 4.3% (attaining the level of slightly over EUR 3.5 billion). The traditionally high deficit in the trade in these products has deepened even further – by approximately EUR 0.5 billion, attaining the level of EUR 6 billion.


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9 FORECASTS FOR 2014 According to IMF forecasts from July 2014, the economic revival experienced by the global economy in the second half of 2013 will continue into the current year; however, the pace thereof will be relatively slow and will continue to remain subject to a significant degree of uncertainty. The impulse towards recovery originated mostly from highly developed economies, although the situation in individual countries remains quite varied. Analysts have decreased the growth forecasts for the United States to 1.7% (compared to the 2.8% predicted in April 2014) following the underwhelming economic performance of the American economy in the first quarter. This has been the consequence of exceptionally adverse weather conditions as well as – to some extent – of the gradual decline in demand for reserves, following the dynamic increase thereof at the end of 2013. The fiscal consolidation in Japan, scheduled for years 2014-2015, will result in a moderate rate of economic growth (1.6%). The economic growth in emerging economies, forecasted at 4.6%, may ebb slightly due to the currently performed efforts aimed at adjusting the economies in question to a more challenging financial environment in which international investors have become more sensitive towards the prospects for the normalization of the monetary policy as well as towards the opportunities for restoring the conditions conducive to economic growth in some of the more advanced economies. As a result, the financial conditions prevailing in emerging economies have been made even more stringent, whereas in developed economies these conditions have generally remained stable. The average growth rate of the global economy has increased markedly, rising from approximately 2.7% in the first half of 2013 to 3.75% in the second half of the year. This has been the consequence of the economic recovery in mature economies; in emerging economies this recovery attained negligible levels. The most recent data indicates that the growth rate of the global economy in the first half of 2014 will only experience a moderate increase. In general, IMF projections for 2014 assume that economic growth will attain the level of 3.4%, rising to 4% in 2015. Table 22 Changes in GDP in the world and in selected markets in the years 2013-2015

2013 2014** 2015**

World 3.2 3.4 4.0 Advanced economies 1.3 1.8 2.4 United States 1.9 1.7 3.0 European Union 0.2 1.6 1.8 Euro Area* -0.4 1.1 1.5 Germany 0.5 1.9 1.7 France 0.3 0.7 1.4 Italy -1.9 0.3 1.1 Japan 1.5 1.6 1.1 Emerging and developing economies 4.7 4.6 5.2 CIS 2.2 0.9 2.1 Russia 1.3 0.2 1.0 Developing Asia 6.6 6.4 6.8 China 7.7 7.4 7.1 India 5.0 5.4 6.4

* excluding Latvia; ** forecast Source: Strategy and Analyses Department of the Ministry of Economy on the basis of IMF data from April and July 2014.

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The economy of the Eurozone will cease shrinking, with economic growth attaining the level of approximately 1.1% in 2014 and rising to 1.5% in 2015, following the 0.7% and 0.4% decline in 2012 and 2013 respectively. In Germany, owing to favourable monetary policy, improvement of labour market conditions as well as improvement in terms of consumer moods, the domestic demand is expected to rise, which will manifest itself primarily in increased consumption and a revival in terms of investment activities and residential construction, although the revival in question is likely to be beset by uncertainty. IMF predicts that the global trade will grow by 4.7% in 2014 – an upward adjustment compared to the earlier forecast which assumed a 4.5% growth; in 2015, the rate of growth of global trade is expected to increase to 5.3%. The global trade forecasts are based on the assumption, that in 2014 the global GDP (adjusted for the impact of exchange rate changes) will increase by 3%, rising to 3.1% in 2015. According to WTO estimates, following a trend set in the previous years, the developing and less developed markets will grow at a more rapid pace (a 4.7% growth in 2014, followed by a 5% growth in 2015) than developed markets (with forecasted growth amounted to 2.1% and 2.2% respectively), which will also translate into better trade dynamics in the former group of markets. Analysts expect the export from developed economies to rise by 3.6% in 2014, while the export from developing countries (including the Commonwealth of Independent States) will rise by 6.4%. With respect to import, the WTO expects an export growth at a rate of 3.4% and 6.3% respectively. In geographic terms, experts estimate that the fastest export growth rate will be observed in Asia (up by 6.9%), followed by North America (up by 4.6%), Central and South America (up by 4.4%) and Europe (up by 3.3%). It is estimated that the group of markets including Africa, the CIS and the Middle East will experience the slowest export growth rate (up by 3.1%). Table 23 Changes in global commodities turnover and global GDP in years 2011-2015

2011 2012 2013 2014* 2015*

Volume of merchandise trade

World 5.4 2.3 2.1 4.7 5.3

Exports

Advanced economies 5.2 1.1 1.5 3.6 4.3

Developing and emerging economies 5.8 3.8 3.3 6.4 6.8

Imports

Advanced economies 3.4 0.0 -0.2 3.4 3.9


Real GDP (at market exchange rates)

World 2.8 2.3 2.2 3.0 3.1

Advanced economies 1.5 1.3 1.1 2.1 2.2


* forecast Source: Strategy and Analyses Department of the Ministry of Economy on the basis of WTO data from April 2014.

The growth of export will be driven by the increasing import demand of developed countries; on the other hand, the factor hampering the growth of import on these markets will be the persisting difficult situation on the labour market, including the high unemployment in European countries. According to estimates, Asia will also be the leader with respect to the growth of import, which is predicted to increase by 6.4% in 2014. However, it is worth noting that there may be significant differences in the growth rate between individual economies of this region. The subsequent spots in terms of import growth are expected to be taken by the group of markets including Africa, the CIS and


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the Middle East (up by 5.8%), Central and South America (up by 4.1%), North America (up by 3.9%) and, finally, Europe (up by 3.2%). The above-mentioned forecast, however, is beset by the uncertainty arising from the current geopolitical situation. Social and territorial conflicts in the Middle East as well as current situation in Eastern Europe (the conflict between Russian and Ukraine) could, in the case of escalation thereof, result in an increase of the prices of energy raw materials and the restriction of trade flows. Among the dangers that may adversely affect the global trade growth rate, analysts also point out the risk of deterioration of the economic situation, including the emergence of financial turmoil on emerging markets, resulting from the monetary policy pursued in the United Stated and other developed countries. The fact that economic growth in the USA could be more rapid than originally expected may lead to further instability in developing countries that remain concerned about the interest rates in the American economy being raised, as it may result in the outflow of capital from developing countries due to the fact that investors will continue to seek more substantial profits in developed countries. OECD analysts estimate that 2014 will bring about a slight economic recovery at the level of 3.4% (compared to 2.8% in the previous year). This is expected to entail an increase in the global trade growth rate from 3% in 2013 to 4.4% in 2014. Experts expect a more rapid GDP and trade growth in less developed economies (non-OECD countries) than on developed markets. With respect to the first group, it is estimated that the economy and trade will grow at a rate of 4.9% and 5.3% respectively, while for the latter group the growth rate is expected to amount to 2.2% and 3.9% respectively. Table 24 Changes in trade turnover volume (goods and services) in years 2013-2015

2013 2014* 2015*

Exports Imports Exports Imports Exports Imports

Germany 1.0 1.0 5.1 4.8 4.6 6.0

France 0.8 0.8 4.1 3.3 5.7 5.1

Italy 0.0 -2.9 3.8 2.4 4.6 4.0

United Kingdom 1.0 0.5 3.8 2.9 4.1 3.7

Netherlands 1.4 -0.2 2.6 3.1 4.4 3.8

Poland 4.3 0.7 5.4 3.9 6.0 6.3

United States 2.7 1.4 2.7 3.1 5.3 7.2

Japan 1.6 3.4 4.8 7.1 6.9 4.5

* forecast Source: Strategy and Analyses Department of the Ministry of Economy on the basis of OECD data from May 2014. OECD estimates that the Polish volume of export of goods and services will increase in 2014 to the level of 5.4% due to the relatively advantageous forecasts of import dynamics of our main trade partners, i.e. Germany (4.8%), the United Kingdom (2.9%) and the Czech Republic (4.6%) as well as the revival of their domestic demand in 2014, which is expected to grow by 1.6%, 2.9% and 0.6% respectively. According to the estimates of OECD experts, following a 0.2% decline in 2013, in 2014 the internal demand in Poland is expected to increase by 2.5%. This will translate into an increase in the volume of Polish import, which is estimated to grow by 3.9%, compared to 0.7% in 2013. The internal demand forecasts with respect to the markets of the main recipients of the goods exported from our country also suggest that the growth of Polish exports will be maintained. The European Commission estimates that in 2014 the level of demand in European Union will rise by 1.4%, following a 0.4% decline in 2013, while in the Eurozone it is expected to rise by 1%, following a 1% decline experienced in the previous year. An increase of the demand growth rate is expected to occur on the

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markets of our two most significant trading partners, i.e. Germany, where the rate of growth should attain the level of 1.8% compared to 0.5% in 2013, and the United Kingdom, where the rate of growth is expected to attain the level of 2.5%, compared to 1.5% in 2013. Taking into account the projected improvement in the global economic situation, including, in particular, the expected economic revival – which will also encompass the demand on the markets of the EU, which are of key significance to Polish exports – as well as the decisive influence of the aforementioned factor on the Polish export dynamics, the Polish merchandise trade is expected to attain the following level and dynamics in 2014 (expressed in EUR, in current prices):

− a 9% increase in export, to a level of approximately EUR 168.9 billion,

− a 8% increase in import, to a level of approximately EUR 169.5 billion, and as a consequence – the further reduction of the deficit in merchandise trade to a level of approximately EUR 0.6 billion, compared to EUR 2 billion in 2013.


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ANNEX 1. IMPACT OF IMPORTS OF ENERGY RAW MATERIALS ON TOTAL POLISH IMPORT EXPENDITURE IN YEARS 2003-2013 1. International market of energy raw materials

After the collapse of the global energy market in 1990s when, in the second part of that period, crude oil prices temporarily fell even below 10 USD/bar., expectations of manufacturers, including also of the OPEC officials, were focused on prices of crude oil at the level of 21-22 USD/bar., which, for a long period of time, was seen as a desirable and stable price. Since the beginning of the 1st decade of the 21st century, however, the prices of crude oil and, as a result, of natural gas, began to rise rapidly. The process accelerated in 2004, which marked the beginning of the 5-year-long period of rapid rise in crude oil prices on the global market. During the period between 2003 and 2008, the prices increased almost fivefold compared to 2002, rising by more than 30% in respect of the preceding year in 2004, by almost 50% in 2005, 25% in 2006, 13% in 2007, and by a further 45% in 2008. Analysts examining the reasons for such a sharp increase in prices agree that in no more than 60% did the process result from supply and demand conditions prevailing on the international market of fuels and raw materials; the remaining 40% was due to risk capital activities. The above statement pertains, in particular, to 2007 as well as 2008 and the subsequent years, when international commodity markets and especially fuel and energy markets experienced the inflow of risk capital from the troubled real estate market. Table 1. Average annual prices of crude oil and natural gas exported from Russia

Years Urals crude oil

USD/bar. Natural gas USD/1000 m3

2001 21.4 98.3 2002 22.2 85.7 2003 24.9 105.5 2004 31.8 109.1 2005 47.1 151.4 2006 58.8 216.0 2007 66.4 233.7 2008 95.3 353.7 2009 57.5 249.3 2010 76.2 268.5 2011 107.3 338.9 2012 2013

109.7 106.9

348.3 342.3

Source: CBR (Central Bank of Russia); Ministry of Economic Development of the Russian Federation.

The situation on the international fuel market can be illustrated by the example of raw materials exported by the leading player on the international energy market – Russia. Before the economic crisis of 2008/2009, average annual prices of Urals crude oil exported by Russia rose from 21.4 USD/bar. in 2001 to 95.3 USD/bar. in 2008, i.e. more than 4.5 times. The highest level of crude oil prices in history was recorded on 11 July 2008 when the prices on the New York stock exchange reached 147.27 USD/bar. On that day, the price of Urals crude oil reached its maximum level of 139.87 USD/bar. After a

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drop by almost 40% to the level of 57.5 USD/bar. in 2009, average annual prices of Russian crude oil exceeded their record level of more than 100 USD/bar. in years 2011-2012, reaching the level of more than 110 USD/bar. in 2012. Prices of Urals crude oil rose nearly fivefold over the past decade, if we compare their level in 2013 with the level from 2002. Natural gas prices followed the trend set by crude oil with a delay of 6-9 months. Prices of natural gas exported from Russia grew from 98.3 USD/1000 cubic metres in 2001 to 353.7 USD/1000 cubic metres in 2008, i.e. almost fourfold. This record price level, following the 2009 economic collapse, has not as yet been exceeded. Within the period between 2012 and 2013, the export prices for Russian natural gas have increased nearly fourfold.

2. Poland on the international crude oil and gas market Poland is a significant importer of energy raw materials. Over the past years, crude oil imports have covered approx. 95.5 – 97% of domestic demand for this type of fuel. As far as natural gas is concerned, the share of imports is approx. 70%. Over the last decade crude oil imports increased by almost 40%, rising from 17.7 million tonnes in 2002 to 24.6 million tonnes in 2012. As for natural gas, the growth in imports over the same period reached 52%, amounting to 11,605 million cubic metres in 2012 compared to 7,775 million cubic metres in 2002. Table 2. Polish import of crude oil and natural gas during 2002-2013

Crude oil Natural gas Years thousand

tons EUR million

average price EUR/ton

million m3 EUR million average price EUR/1000 m3

2002 17,717 3,154 178 7,775 879 113 2003 17,028 2,895 170 8,721 1,029 118 2004 17,316 3,377 195 9,445 1,058 112 2005 17,912 5,230 292 9,919 1,557 157 2006 19,813 6,954 351 10,354 2,205 213 2007 20,885 7,602 364 9,598 2,044 213 2008 20,787 9,541 459 10,619 3,356 316 2009 20,098 6,271 312 9,435 2,588 269 2010 22,688 9,710 428 10,325 2,850 276 2011 23,792 13,657 574 11,174 3,620 324 2012 24,633 15,223 618 11,605 4,283 391 2013 2013/2002

23,346 1.32

13,704 4.34

587 3.30

11,818 1.52

4,030 4.58

341 3.02

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of data of the Central Statistical Office and the Energy Market Agency (ARE).

Table 3. Import of crude oil by country of origin

2011 2012 2013

thousand tons % thousand tons % thousand tons %

Russia 21,853 91.9 23,518 95.5 22,270 95.4 Norway 1,337 5.6 828 3.4 757 3.2 United Kingdom 477 2.0 n/d n/d 246 1.1 Other 125 0.5 287 1.1 73 0.3 TOTAL 23,792 100.0 24,633 100.0 23,346 100.0

n/d – no data available Source: Strategy and Analyses Department of the Ministry of Economy on the basis of data of ARE.

With respect to crude oil, the position of Russia – with a share in the Polish imports of this raw material amounting to well above 90% – remains unchallenged. Crude oil is supplied mainly through the Friendship pipeline.


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Table 4. Import of natural gas by country of origin

2011 2012 2013

million m3 % million m3 % million m3 %

Russia 9,549 85.5 9,261 79.8 9,115 77.1

Germany 1,625 14.5 1,788 15.4 2,150 18.2

Czech Republic n/d n/d 556 4.8 553 4.7

TOTAL 11,174 100.0 11,605 100.0 11,818 100.0

n/d – no data available Source: Strategy and Analyses Department of the Ministry of Economy on the basis of data of ARE.

The position of Russia with respect to Poland’s natural gas imports has weakened over the past years. Due to the launch and development of interconnectors with Germany (Lasowo crossing point) and with the Czech Republic (Cieszyn crossing point), the share of Gazprom in gas supplies to the Polish market fell to 77% in 2013. It does not mean, however, that the share of Russian gas in Polish imports decreased, because all or a substantial amount of gas supplied with the use of both interconnectors could have been supplied by Gazprom to the German market at an earlier stage. 3. Impact of increase in crude oil and natural gas prices on import expenditure during 2003-2013 During the period between 2003 and 2013, the value of the Polish imports grew nearly 2.8 times, rising from EUR 55.1 billion in 2002 to EUR 157 billion in 2013. During the same period the import of crude oil and gas has risen 4.4 and 4.6 times respectively in terms of value (from EUR 3.2 billion in 2002 to EUR 13.7 billion in 2013 and from EUR 0.9 billion in 2002 to EUR 4.0 billion in 2013 respectively). With such growth proportions, the share of both raw materials in the entire volume of Polish import has risen substantially, from 7.3% in 2002 to 11.9% in 2013. During the entire period between 2003 and 2013, the accumulated additional import expenditure on purchase of crude oil and natural gas with respect of 2002 amounted to nearly EUR 78.6 billion, of which an amount of EUR 59.5 billion was spent on crude oil (75.7%) and EUR 19.6 billion on gas (24.3%).

Table 5. Increase in accumulated import expenditure on the purchase of crude oil and gas in years 2003-2013 (base year 2002)

Crude oil Natural gas Oil+gas

EUR million

% EUR

million %

EUR million

%

Overall increase of import expenses, of this:

59,474 100.0 19,160 100.0 78,634 100.0

caused by volume growth 5,046 10.0 3,106 16.2 9,052 11.5 caused by price increase 53,528 90.0 16,054 83.8 69,582 88.5

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of data of ARE.

The growth in expenditure resulted mainly from the rapidly growing prices, the share of which in that process amounted to 88.5%. As a result, the increased volume has a 11.5% share in the growth of import expenditure. A particularly high influence of prices as the causative factor of increased import expenditure during the period in question was experienced with respect to crude oil (90%), with a modest contribution from the increased volumes (10%). As for natural gas, the proportions were as follows: 83.2% – prices, and 16.2% – volumes. The 2008/2009 crisis and the ensuing fall in prices has managed to arrest the increase of the Polish expenditure relating to the purchase of crude oil and gas for a limited time only. In 2009, prices of crude oil fell by 22% compared to 2008, while the prices of gas decreased by 14.9%. Subsequent years,

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however, saw a rapid increase in prices, although their pre-crisis level from 2008 was only exceeded in 2011. During the period between 2010 and 2012, prices of crude oil imported to Poland rose by more than 98% and prices of gas – by more than 37%. In 2013, the prices of both of the raw materials referred to above have decreased, with the prices of crude oil and gas falling by 5% and 12.8% respectively. Chart 1. Increase in expenditure on crude oil imports due to growing volumes and rising prices in years 2003-2013 (base year 2002)

-2 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Increase of import expenses on petroleum oil, total:

caused by volume growth

caused by price increase

Note: (1) increase in expenditure due to growing volumes = growth of volumes in a given year in relation to 2002 x average price in 2002; (2) increase in expenditure due to rising prices = imports volumes in the given year x increase in price in a given year in relation to 2002 Source: Strategy and Analyses Department of the Ministry of Economy on the basis of data of the CSO and the ARE.

Chart 2. Increase in expenditure on natural gas imports due to growing volumes and rising prices in years 2003-2013 (base year 2002)

-500

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Increase of import expenses on natural gas, total:

caused by volume growth

caused by price increase

Note: (1) increase in expenditure due to growing volumes = growth of volumes in a given year in relation to 2002 x average price in 2002; (2) increase in expenditure due to rising prices = imports volumes in the given year x increase in price in a given year in relation to 2002 Source: Strategy and Analyses Department of the Ministry of Economy on the basis of data of the CSO and the ARE.

Table 6. Impact of the increase of the prices of energy raw materials since 2003 on the import-related expenditure in years 2003-2013 (base year – 2002)

No. Description 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Crude oil

1 Imports volume thous. tons

17,717 17,316 17,912 19,813 20,885 20,787 20,098 22,688 23,792 24,633 23,346

2 Average imports price of 1 ton of petroleum oil EUR 178 195 292 351 364 459 312 428 574 618 587

3 Import expenses EUR mn 3,153 3,376 5,230 6,954 7,602 9,541 6,270 9,710 13,657 15,223 13,704

4 Volume growth compared to 2002 thous. tons

- -401 195 2,096 3,168 3,070 2,381 4,971 6,075 6,916 5,629

5 Price increase compared to 2002 EUR - 17 114 173 186 281 134 250 396 440 409

6 Overall increase of import expenses, of this: EUR mn - 223 2,076 3,800 4,448 6,387 3,116 6,556 10,503 12,069 10,551

6.1 caused by volume growth EUR mn - -71 35 373 564 546 424 884 1,081 1,231 1,002

6.2 caused by price increase EUR mn - 294 2,041 3,427 3,884 5,841 2,693 5,672 9,422 10,838 9,549

Natural gas

7 Imports volume mln m³ 7,775 9,445 9,919 10,354 9,598 10,619 9,435 10,325 11,174 11,605 11,818

8 Average imports price per 1 thous. m³ of gas EUR 113 112 157 213 213 316 269 276 324 391 341

9 Import expenses EUR mn 879 1,058 1,557 2,205 2,044 3,356 2,538 2,850 3,620 4,538 4,030

10 Volume growth compared to 2002 mln m³ - 1,670 2,144 2,579 1,823 2,844 1,660 2,550 3,399 3,830 4,043

11 Price increase compared to 2002 EUR - -1 44 100 100 203 156 163 211 278 228

12 Overall increase of import expenses, of this: EUR mn - 179 679 1,327 1,166 2,477 1,659 1,971 2,741 3,659 3,151

12.1 caused by volume growth EUR mn - 189 242 291 206 321 188 288 384 433 457

12.2 caused by price increase EUR mn - -9 436 1,035 960 2,156 1,472 1,683 2,357 3,226 2,694

Crude oil and natural gas, total

13 Overall increase of import expenses, of this: EUR mn - 402 2,755 5,128 5,614 8,865 4,776 8,527 13,244 15,728 13,702

13.1 caused by volume growth EUR mn - 117 277 665 770 868 611 1,172 1,465 1,664 1,459

13.2 caused by price increase EUR mn - 285 2,478 4,463 4,844 7,997 4,165 7,355 11,779 14,064 12,243

Note: (1) increase of expanses caused by volume growth = increase of volume during the given year, compared to 2002 x the average price in 2002; (2) increase of import expenses cause by price increase = imports volume in given year x price increase in the given year, compared to 2002

Source: Strategy and Analyses Department of the Ministry of Economy on the basis of data of the CSO and the ARE.

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List of tables

Table 1 Changes in global GDP and in selected markets in the years 2012-2013.......................... 9

Table 2 Changes in domestic demand in major markets in the years 2012-2015 ......................... 11

Table 3 Changes in global goods and services trade in 2012-2015.............................................. 14

Table 4 Changes in GDP and in global volume of trade in goods in the years 2011-2013............ 14 Table 5 Changes in merchandise trade by region and selected economies in the years 2005-2013

(in USD terms) ................................................................................................................ 16

Table 6 World's leading exporters and importers of goods in 2013............................................... 19

Table 7 Changes in GDP in the world and in selected markets and changes in the global goods and services trade in the years 2011-2015 ..................................................................... 22

Table 8 Polish foreign trade in the years 1991-2013 according to the CSO data.......................... 33

Table 9 Changes in the geographical structure of trade in goods (in EUR million)........................ 36

Table 10 Changes in exchange of commodities aggregated in 10 commodity groups (in EUR million)............................................................................................................................. 38

Table 11 Poland's trade in goods in the years 2011-2013 (in EUR million)..................................... 41

Table 12 Trade in goods and services as well as balance on current account and their relations per capita and against GDP in the years 2009-2013............................................................. 43

Table 13 Commodities turnover in the years 2012-2013 according to the CSO data...................... 44

Table 14 Changes in the geographical structure of Polish trade in goods and their impact on the trade balance (in EUR million)......................................................................................... 49

Table 15 Commodity structure of Polish trade during 2012-2013 and its impact on the trade balance (in EUR million) ............................................................................................................... 67

Table 16 Changes in Polish foreign trade per commodity groups, sections and subsections as well as their impact on the trade balance (in EUR million)...................................................... 68

Table 17 The geographical structure of the foreign trade in services in years 2012-2013 (in EUR million)............................................................................................................................. 77

Table 18 Poland's trade in services in the years 2012-2013 (in EUR million) – service type structure........................................................................................................................................ 81

Table 19 Poland’s trade in goods during the period from January 2013 to June 2014.................... 83

Table 20 Changes in the geographical structure of Polish foreign trade after the 1st half of 2014 and their impact on the balance of exchange (in EUR million) ............................................... 85

Table 21 Changes in the commodity structure of Polish foreign trade after the 1st half of 2014 and their impact on the balance of exchange (in EUR million) ............................................... 88

Table 22 Changes in GDP in the world and in selected markets in the years 2013-2015 ............... 91

Table 23 Changes in global commodities turnover and global GDP in years 2011-2015................ 92

Table 24 Changes in trade turnover volume (goods and services) in years 2013-2015.................. 93


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List of charts

Chart 1 Changes in the volume of trade in goods in selected countries and groups of countries in the years 2011-2013 ....................................................................................................... 15

Chart 2 Changes in trade in selected groups and countries in the years 2011-2013 (in USD terms)........................................................................................................................................ 17

Chart 3 Inflow of foreign direct investments to Poland in the years 2004-2013 (in EUR million) ... 30

Chart 4 Changes in the pace of growth in transaction, foreign currency and NEER prices in exports in the years 2000-2013 (yoy).............................................................................. 31

Chart 5 Relation of the current account balance to the GDP (in %) .............................................. 42

Chart 6 Geographic structure of the balance of Polish foreign trade in goods in 2013, compared to 2012 and 2009 (in EUR billion) ....................................................................................... 57

Chart 7 Changes in Polish export of main commodity groups in the years 2009-2013 (in EUR, previous year = 100) ....................................................................................................... 59

Chart 8 Changes in Polish import of main commodity groups in the years 2009-2013 (in EUR, previous year = 100) ....................................................................................................... 59

Chart 9 Commodity structure of Polish exports in 2013, compared to 2012 and 2009 (in %) ....... 64 Chart 10 Commodity structure of Polish imports in 2013, compared to 2012 and 2009 (in %) ....... 65

Chart 11 Commodity structure of Polish foreign trade balance in 2013, compared to 2012 and 2009 (in EUR million) ............................................................................................................... 66

Chart 12 Structure of imports distribution in the years 2008-2012 (share in %) .............................. 73 Chart 13 Polish foreign trade in goods and services in the years 2000-2013 (in EUR billion)......... 75

Chart 14 Poland’s trade in goods during the period from January 2013 to June 2014.................... 84

Chart 15 Monthly export and import dynamics during the period from January 2013 to June 2014 (yoy) ................................................................................................................................ 84