Investors are increasingly shifting their focus to the Warsaw Stock Exchange, where an unexpected resurgence has taken place amid ongoing political volatility. Poland’s primary stock market index, the WIG, has surged approximately 25% since the start of 2025, starkly contrasting with modest gains in other major stock markets worldwide. The S&P 500 has managed only a 1.75% increase during the same timeframe, while the FTSE 100 and EURO STOXX 50 achieved growth of 6.5% and 10%, respectively. This remarkable performance has started to capture the attention of investors who may have previously overlooked Poland as a viable investment destination.
Several companies listed on the Polish exchange have outperformed the broader market’s impressive strides. Orlen, a partially state-owned energy giant ranked the 32nd largest in Europe by revenue, has seen its stock rise nearly 60% since January. Insurance provider PZU, also partly state-owned, has experienced stock growth of around 31%. Similarly, Dino, one of Poland’s largest supermarket chains, has recorded gains close to 30% over the same period. The consistent upward trajectory of the WIG index is not merely a recent phenomenon; it has expanded approximately 94% over the past five years, outpacing Germany’s DAX index, which increased by approximately 89%, and France’s CAC 40, which rose by 49%. The data suggests that Poland’s market performance has even rivaled that of the S&P 500, which gained about 87% over the last five years, although the tech-focused NASDAQ composite marginally outperformed Poland with a nearly 99% increase.
Expert analysis underscores that this robust performance has been fueled by several factors, including strong economic growth, appealing valuations, and a renewed interest from investors following the European elections in 2023. Pawel Majtkowski, an analyst at eToro, attributes the surge to these dynamics but acknowledges a potential cloud hanging over future market performance due to political developments—especially following the recent presidential election results that saw Karol Nawrocki of the Law and Justice party (PiS) win by a narrow margin on June 1, 2025.
Since the 2023 general elections, Poland has operated under the leadership of Prime Minister Donald Tusk and a coalition of liberal parties aimed at dismantling the legacy of the outgoing PiS administration. This coalition was a strategic alignment designed to remove PiS, which had maintained power since 2015. Andrzej Duda, a member of PiS, served as the Polish president for a full two terms, effectively endorsing the party’s policies. However, Tusk’s government, though it has enacted some reform measures, has faced challenges from internal disagreements and presidential vetoes, which have complicated its agenda. Nawrocki’s recent election win has raised investor concern, particularly given his nationalistic stance, leading to immediate market reaction reflected in a 2% decline in the WIG 20 index, which tracks Poland’s top 20 firms.
The prospect of increased political uncertainty has left investors wary of the implications on the stock market’s upward trajectory. With a nationalist directly opposing the liberal ruling coalition, analysts foresee higher tensions and possibly obstructed reforms that could inhibit further economic growth. Tusk’s diminishing authority post-election, as evidenced by Nawrocki’s victory margin of just 1.8%, raises questions about the coalition’s efficacy and long-term stability.
As tensions escalate, Tusk has announced plans for a confidence vote on June 11 in hopes of consolidating support within his coalition, an action driven by the need to counterbalance the newly revived PiS presidency. This looming confrontation illustrates the precariousness of the current governance arrangement, as Tusk and his party must navigate an increasingly adversarial landscape where opposing forces wield considerable influence.
While the immediate economic impacts of the new presidency remain to be seen, Majtkowski highlights a growing concern that the evolving political landscape may dampen foreign investor appetite for Polish equities. This is particularly significant given the structural characteristics of the Polish stock market, where many firms possess substantial state ownership. For instance, the Polish government retains a 49.9% stake in Orlen and a considerable 31% in PKO Bank Polski, Poland’s largest bank. Such state involvement makes the market particularly susceptible to fluctuations influenced by shifting political dynamics.
Majtkowski emphasizes that these developments could complicate the outlook for Poland’s largest firms, further suggesting that the WIG 20 index might encounter more resistance to upward mobility than the broader WIG index due to its higher concentration of state-influenced entities. The political unrest following the election results has sent ripples throughout Tusk’s coalition, introducing the potential for rapid changes within the government which could directly impact corporate valuations among publicly traded companies reliant on state stability.
Additionally, with the political landscape darker now for Tusk’s progressive reforms, the likelihood of an interest rate cut by Poland’s central bank in June has diminished. Sustained high-interest rates may constrict economic growth as the central bank grapples with rising inflation, consequently impacting not just general market sentiment but also the performance of financial institutions, which are critical to the Warsaw Stock Exchange’s functioning.
Investors are, therefore, faced with a complex scenario as they weigh the risks of political uncertainty against the backdrop of an otherwise robust stock market performance. The forthcoming months may present a litmus test for the resilience of the Polish stock market, particularly as it navigates the dual challenges of sustaining robust gains amid political headwinds and adapting to the policy directions of a newly inaugurated presidency determined to advance a nationalistic agenda. This raises significant questions not only about the future trajectory of Poland’s capital markets but also about broader implications for regional and international investors looking for opportunities in emerging European markets.