Analysis of the Impact of Brexit on the Polish Economy - Opportunities and Threats

March 31, 2019

The objective of this study is to analyse six assumptions that are frequently made in public discussions of the impact of Brexit on the Polish economy:

  1. The UK is currently Poland’s second biggest export market, and it is far less important than Germany. Therefore, the Polish economy would not be significantly affected by a ‘no deal’ scenario in Brexit negotiations.
  2. Polish manufacturing would benefit from a ‘no deal’ scenario because some manufacturing plants in the UK would relocate to the EU, and they are likely to choose Poland as a new location because of Poland’s competitive advantage (cheaper, highly educated workforce) over other EU countries.
  3. Polish manufacturers would not be affected by a ‘no deal’ scenario because WTO tariffs are not that high, and, anyway, Polish goods are price competitive, so they will be in a better position to compete than goods from the other EU countries.
  4. In the event of a ‘no deal’ scenario, Polish food and agriculture (and other) manufacturers would find new markets for their products, just as they did when trade restrictions with Russia were imposed.
  5. If a trade deal did not include services, then Poland would benefit because more business service centres would be located in Poland.
  6. The Polish economy does not significantly benefit from links to the financial services industry in the UK, neither in terms of stability nor investment.