Domański: We count on investment growth thanks to banks, WSE, PE, but also REITs

In order for Poland's GDP growth to be more investment-driven, there is a need, among other things, to accelerate lending, but also to strengthen the stock exchange, private equity and venture capital markets and to implement new instruments such as REITs (Real Estate Investment Trust), according to Finance Minister Andrzej Domański.

‘Internal consumption is still the most important engine of economic growth, wage increases, a rising minimum wage - all this makes consumption grow clearly and is this main engine. But the time has come to turn on other engines of economic growth and it is clear that investment is such an engine. This year, the rate of investment growth can still be expected to be moderate, but already in 2025, together with the absorption of EU NIP funds and thanks to the use of public and private financing, we should expect - in the opinion of the Ministry of Finance - a significant investment impulse,’ - Domański said during a speech at the 16th European Economic Congress in Katowice.

The minister assessed that the falling investment rate - to below 17% - was a clear indication that not only public investment, but also private investment had not sufficiently joined in driving economic growth.

"We know that the banking sector has a strong liquidity position, we know that the profitability of the sector remains high. Meanwhile, the volume of loans in Poland is still significantly lower compared to Western European countries. In Q3 2023, the volume of loans was equivalent to 63% of GDP, while in Germany it was 123% and in the United States it was 150% of GDP. Thus, one can see a clear gap between Poland and the countries, as well as countries in our region," Domański pointed out.

"Of course, I realise that it is not only a question of credit supply, but also of credit demand - and this is what we talk about with entrepreneurs, why credit in Poland is growing so slowly. There is certainly a need to accelerate credit. We are having and will continue to have a discussion on what to do to make this credit action in Poland accelerate," he added.

The minister stressed that also the Warsaw Stock Exchange (WSE) is "an important tool to drive investment in Poland".

"We want the Stock Exchange to regain its shine, to regain its dynamism. Already the first actions are generating a high level of optimism, but of course we cannot only think about IPOs, we also have to think about private equity, we have to think about the development of a venture capital fund, also about new instruments such as REITs. This, of course, is not decided only by the Ministry of Finance, while I would like to declare here that we as the Ministry of Finance will be very active in ensuring that these new instruments, which enable investment growth, are developed," the minister concluded.

Adopted at the end of April by the Council of Ministers, the ‘Long-term State Financial Plan for 2024-2027’ (WPFP) envisages, among other things, that private consumption in 2024-2027 will grow by, respectively: 3,5%, 3,6%, 3,3% i 3,2%. Public consumption will record growth of respectively: 5,1%, 2,1%, 2% i 2%.

Gross fixed capital formation will increase as expected in the document by: respectively: 2,9%, 10,2%, 6,7% i 4,6%.

Source: ISBnews