Is Poland Leading the Next Bull Market in Emerging Markets?
Data shows that Poland’s main stock index WIG has risen 28.6% this year, far exceeding the S&P 500’s mere 1% cumulative increase, making it one of the strongest-performing markets globally this year.
Analysis points out that the strong performance of the Polish stock market is partly due to the country’s relatively independent position from the global trade war, as well as expectations of benefiting from Germany’s massive fiscal stimulus plan.
Tomasz Bardziłowski, CEO of the Warsaw Institute, stated that this surge is driven by “a large influx of foreign capital,” benefiting from Poland’s healthy economy and the rising dividends and relatively low valuations in the stock market.
Bardziłowski noted that the current price-to-earnings ratio of Polish stocks is 15% lower than that of the MSCI Emerging Markets Index.
U.S. Trade War Boosts “Peaceful Trade,” Economic Growth Remains Resilient
Since April, the trade war initiated by Trump has effectively shifted capital flows from the U.S. to emerging markets like Poland and some Latin American countries that are less affected by tariffs.
Piotr Arak, chief economist at VeloBank in Poland, pointed out:
“The market size is small enough that foreign capital flows can have a significant impact.”
Additionally, Poland’s domestic economic growth has also shown strong resilience.
Data from Eurostat indicates that Poland’s economy grew by 3.8% year-on-year in the first quarter of 2025, making it the second-fastest growing country in the EU (after Ireland), far exceeding the EU’s average growth rate of 1.4%.
Analysts expect that the earnings per share of companies listed on the Warsaw Stock Exchange will grow by about 10% on average in 2025. Among them, financial services companies, which account for 40% of the WIG index’s weight, are raising dividends after achieving record profits this quarter.
Beata Javorcik, chief economist at the European Bank for Reconstruction and Development (EBRD), stated that Poland has maintained resilience during these turbulent times, “thanks to its diversified economy, large domestic market, and limited direct trade exposure to the U.S.”
EU Fund Release Provides Additional Momentum, Focus on June Presidential Election
Moreover, after Prime Minister Donald Tusk and his pro-EU coalition returned to power, they unlocked billions of euros in previously frozen EU funds. These funds are primarily used for infrastructure and energy transition projects, and the government is deploying them to seek to reduce dependence on coal.
Driven by these initiatives, the stock prices of Poland’s state-owned energy group have soared, with oil company Orlen rising 53% and utility company PGE increasing 56% this year.
Investors are currently closely watching the presidential election set to take place on June 1.
At present, the ruling party candidate Rafał Trzaskowski is unexpectedly in a fierce competition with Karol Nawrocki of the opposition Law and Justice Party (PiS)
The chief economist of Poland’s largest bank, PKO BP, Piotr Bujak, stated:
“If the candidate from Tusk’s party wins, it will boost investors’ confidence in Polish assets, while a loss could raise new concerns about whether Poland will continue on the path of reform.”
Emerging Market Investment Opportunities Emerge, Poland May Be Just the Beginning
The case of Poland may just be the beginning of the rise of emerging markets.
As expectations of a weaker dollar increase, U.S. bond yields may have peaked, and the market anticipates a recovery in the Chinese economy, emerging markets are once again becoming the focus of global investors.
According to Bank of America strategist Michael Hartnett’s observations, as of 2025, not only has the Polish stock market become the best-performing stock market, but also:
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Worst-performing asset this year: Oil (-12%)
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Best-performing asset this year: Gold (21%)
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Best-performing currency this year: Russian Ruble (41%)
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Both the Tel Aviv and Tehran stock exchanges have reached all-time highs
Hartnett concludes that this year, geopolitics will drive the market, and “peace trades” will outperform “war trades” in 2025. In such an environment, “nothing will perform better than emerging market stocks.”
