Poland’s stock market has become one of the world’s top performers this year, aided by the country’s relative insulation from the global trade war and the anticipated economic boost from Germany’s fiscal expansion. The WIG Poland index has increased by 28.6 percent year-to-date, despite a decline following a close first-round presidential election. This rise places it ahead of other strong markets such as Chile and Greece, while the U.S. S&P 500 has seen only a 1 percent increase.
The surge has been attributed to a significant inflow of foreign capital, according to Tomasz Bardziłowski, CEO of the Warsaw Stock Exchange. This inflow is due to Poland’s robust economy, increasing dividend payouts, and relatively low market valuations. Polish stocks are trading at a 15 percent price-to-earnings discount compared to the MSCI Emerging Markets index.
The market’s appeal is further enhanced by the fact that about three-quarters of Poland’s trade occurs within the EU, making it less vulnerable to the U.S. trade war. Piotr Arak, chief economist at Poland’s VeloBank, highlighted that the trade war has diverted capital from the U.S. to emerging markets like Poland and certain parts of Latin America.
The WIG index is valued at approximately $135 billion, in contrast to the UK’s FTSE 100 at $2.9 trillion and the S&P 500 at over $50 trillion.
Poland, having cut interest rates for the first time since Prime Minister Donald Tusk’s return to power in 2023, is also set to benefit from Germany’s increased planned spending. Germany’s struggling economy previously caused concern in Warsaw, but has since shifted to optimism due to Berlin’s planned fiscal stimulus.
Poland’s economy grew by 3.8 percent year-on-year in the first quarter of 2025, the second-fastest rate in the EU. Analysts expect earnings per share for companies listed in Warsaw to grow by about 10 percent in 2025. Financial services, making up two-fifths of the WIG, are increasing dividends after substantial earnings, with Polish banks reporting profits of 42 billion zlotys in 2024.
According to Beata Javorcik, chief economist at the European Bank for Reconstruction and Development, Poland is expected to have the strongest economy among the EU’s formerly Communist countries this year, with a growth forecast of 3.3 percent.
Political developments have encouraged investment, with Tusk’s government unlocking EU funds for infrastructure and energy projects. State-controlled energy company shares have surged, with Orlen rising 53 percent and PGE up 56 percent.
Despite a 0.8 percent fall in the WIG on Monday, attention is focused on the upcoming presidential runoff election. Rafał Trzaskowski, representing Tusk’s coalition, is in a tight race against Karol Nawrocki of the Law and Justice party. A victory for Trzaskowski could enable previously stalled reforms, while a defeat may destabilize Tusk’s coalition.
Piotr Bujak, chief economist at PKO BP, noted that a victory for Tusk’s party would positively affect investor sentiment, though a defeat could raise concerns about Poland’s reform path.
Both presidential candidates emphasize national security, aligning with Tusk’s warning about global conflict risks. Recent investor focus, however, is on the potential for a peace agreement between Russia and Ukraine, possibly positioning Poland as a hub for Ukraine’s reconstruction. Andrzej Kubisiak, deputy director of the Polish Economic Institute, suggests that investor optimism is partly due to hopes for peace in Ukraine, boosting confidence in Poland’s economic prospects.
