The Polish zloty is looking cheap compared to the euro once again, which suggests that it will be FDI money that maintains Poland’s recovery through 2010 and beyond. 

According to the National Bank of Poland the estimated FDI inflow to Poland as of the end of October 2009 reached 6 billion euros.  In fact, analysts and officials are now revising upwards their growth forecasts, with the market expecting Poland's economy to expand by 2.4 percent in 2010.

Many of the Eastern European accession states were looking in a perilous state during the first onslaught of impending financial doom, but Poland was spared much of the drama.  

In fact, it was the only European Union economy to record positive growth in 2009.  And as far as investors are concerned, Poland is now in pole position for the race back to profitability.

Back in November 2009, Poland’s industry rebounded with the first growth figures since 2008.  It was modest to say the least, but no less impressive after a year characterised by double-digit falls in production amongst their EU neighbours. 

November’s stats were a pleasant aperitif to December’s feast of good news when the Purchasing Managers' Index (PMI) for Poland was reported to have stabilised at 52.4 points – way above the neutral 50 point barrier that distinguishes growth from contraction.  Poland also managed to trump an earlier Reuters poll which forecast the Eastern European state to reach 52.1 points. 

The data suggests that orders are on the rise across Poland’s industrial landscape and prosperity is just around the corner.  Of course, the lack of credit is hampering progress, analysts say, and is proving to be the only obstacle preventing the nation from springing back to pre-crisis growth levels.

You could almost hear investors licking their lips.

The sectors proving most attractive according to leading financial website TheStreet.com are the financial services, with a 40% weighting. Energy is second at 14% with industrials coming in third at 11%.  Investors, it seems are loading up on banks.  Goldman Sachs has also joined the fray recommending that long positions on the Polish zloty against the Japanese yen as one of its top trades for 2010.  The reason for this they say is that the Polish currency is "clearly undervalued." 

Professor Stanisław Gomułka, Poland’s Business Centre Club’s chief economist backs up the optimism:

“Confidence has been restored and most banks and other financial institutions have again become profitable,” he said.  “As I had expected, recession in the global real economy turned out to be quite shallow, though painful to some industries. In Poland, only some segments of the manufacturing industry slid into recession and its scale was smaller compared to neighbouring countries.”

Investors that have done their homework know that the catalysts for success are in place in Poland above many of their neighbours in the east or west.  The reasoning behind this is simple enough: Poland has a young population eager to work, a gross domestic product rate that never contracted into recession, a relatively high interest rate, and an economy driven by domestic trends, not exports.  It doesn’t take John Maynard Keynes to tell you that this might be A Good Thing.

Of course, Poland is a big country – but here’s a tip for those looking to get in on the deal…

The 25-mile-long, fine white sandy beach backed by pine forests skirting the Bay of Gdansk is a good place to sniff investors out.  The coastal resort of Sopot is the focus here – less than 10 miles from downtown Gdansk.  It’s awash with good hotels, cheap beer, fresh fish and guaranteed clear blue skies through July and August.  Combined with an average of 24C, it’s the stamping ground of Polish and German investors and anyone else who’s caught wind of this undiscovered part of the world and now prefer it to France.

The timber-framed cottages beside the powder fine beach are being snapped by those in the know.  Meanwhile, affluent media types and designers from Berlin, Warsaw and Poznan are steadily buying up and renovating the former soviet general's villas that proliferate in this part of the Baltic.

The city port of Gdansk dominates the region economically – and has done for hundreds of years due to its long standing status as one of the most important port cities in Northern Europe.  Don’t be fooled into thinking that the city is characterised by shipyards and an industrial past.  Sure, Gdansk was the crucible for the Solidarity protest movement of the early 80's – lead by the moustachioed Lech Walesa, who became Poland’s President in 1990 – but the city’s renaissance architecture is testimony to its wealth and influence. 

The economic sureness continues to this day.  However, Gdansk has diversified its industrial interests – shipping and shipbuilding is still dominant but petrochemicals, food processing, and a burgeoning hi-tech sector of electronics, telecommunications, and IT engineering is on the rise.

Of course, Gdansk’s strategic geographic position on the expanding markets of whole Europe and Russia (and those wonderful beaches) are the main driver of growth – as they  have been for centuries.  But there is one noticeable difference to the Hanseatic era – they didn’t have people the Gdansk Economic Development Agency Ltd. (InvestGDA) to smooth the transition of companies locating here.

The company promotes foreign direct investment in Gdansk Metropolitan Area and provides expert service on integrating with the local economy.  Isn’t it time you gave them a call?