Poland's Economy Surges on EU-Fueled Momentum: High-Conviction Sectors for 2025 Investors

Poland's Q2 2025 GDP growth of 3.4% year-on-year, as reported by GUS, underscores a resilient economy navigating global headwinds. This acceleration is driven by private consumption, inventory buildup, and strategic EU-funded projects in defense, energy transition, and healthcare. For investors, these sectors represent high-conviction opportunities, blending macroeconomic tailwinds with structural reforms and geopolitical positioning.

Defense: A Strategic Pillar of Growth

Poland's defense sector is a linchpin of its economic strategy, fueled by a 4.7% GDP allocation to defense spending (PLN 186.6 billion) and €45 billion in EU Security Action for Europe (SAFE) loans. These funds are accelerating modernization of military capabilities, including drones, artillery, and the Eastern Shield initiative—a €10 billion project to secure Poland's eastern border.

Key beneficiaries include domestic manufacturers of the Borsuk amphibious infantry fighting vehicle (IFV) and Krab howitzers, which are seeing heightened demand. The Warsaw Stock Exchange's WIG index has surged to record highs in 2025, reflecting investor confidence in defense-linked equities.

The Poland Provided Logistic Support (PPLS) initiative, which trains Polish personnel to maintain U.S. military equipment, further cements Poland's role as a transatlantic logistics hub. For investors, logistics providers, cybersecurity firms, and dual-use technology developers are prime targets.

Energy Transition: Offshore Wind and Nuclear Ambitions

Poland's energy transition is gaining momentum, with offshore wind and nuclear energy as dual pillars. The Baltic Power offshore wind farm, a joint venture between PKN Orlen and Northland Power, is a flagship project. With €18.7 billion in non-recourse financing and 15 MW turbines, it will generate 4,000 GWh annually, powering 1.5 million households. The project's 2026 launch aligns with Poland's 5.9 GW offshore wind target by 2030.

Meanwhile, the Zarnowiec nuclear project, though still in the planning phase, is backed by €1.4 billion in EU funding for digital infrastructure. While regulatory hurdles remain, the project's potential to diversify Poland's energy mix makes it a long-term bet for infrastructure investors.

Healthcare: Digital Transformation and EU Funding

Poland's healthcare sector is undergoing a digital overhaul, supported by €1.03 billion in EU funds for e-health initiatives. The government's 16% increase in healthcare spending to PLN 221.7 billion in 2025 is driving investments in telemedicine, electronic health records, and AI-driven diagnostics.

Startups like Apisense, which uses AI and IoT to monitor bee health, have secured EU Innovation Council (EIC) funding. Meanwhile, the ERDF and National Recovery Plan (KPO) are allocating €4.1 billion for healthcare modernization, including 100% grants for primary care infrastructure.

Public-private partnerships (PPPs) are also accelerating. The Żywiec Powiat PPP Hospital and Łódź Medical Center exemplify how collaboration can modernize healthcare delivery. For investors, IT service providers, medical equipment manufacturers, and digital health startups are key beneficiaries.

Structural Reforms and Long-Term Outlook

While Poland's current growth is consumption-driven, sustainability hinges on structural reforms and EU fund deployment. The ECB's projected rate cuts (over 100 basis points by 2027) and streamlined permitting for offshore wind projects (e.g., removal of the “10H rule”) are critical enablers.

Investors should prioritize:
1. Defense manufacturers with EU-backed contracts (e.g., Borsuk IFV producers).
2. Offshore wind developers like PKN Orlen and Polenergia.
3. E-health startups leveraging EU grants and PPPs.

Poland's strategic alignment with EU and NATO priorities, combined with its demographic resilience and low unemployment (4.5% in July 2025), positions it as a high-conviction market. As EU funds flow into defense, energy, and healthcare, the next 18–24 months will likely see these sectors outperform broader economic trends.

For those seeking exposure, a mix of equities in defense and energy transition, alongside thematic ETFs focused on digital health, offers a balanced approach to capitalize on Poland's accelerating economy.