Atradius Country Report Poland January 2013 Gdansk Warsaw Lodz Krakow
Overview General information Most important sectors (% of GDP, 2011) Capital: Warsaw Services: 63 % Government type: Parliamentary republic Industry: 33 % Currency: Zloty (PLN) Agriculture: 4 % Population: 38.2 million Main import sources (2011, % of total) Main export markets (2011, % of total) Germany: 28.2 % Germany: 26.8 % Russia: 12.4 % UK: 6.6 % The Netherlands: 5.8 % Italy: 6.5 % Italy: 5.2 % Czech Rep.: 6.4 % China: 5.2 % France: 6.3 % Key indicators 2009 2010 2011 2012* 2013* Real GDP growth (y-on-y, % change) 1.6 3.9 4.3 2.3 1.9 Consumer price inflation (y-on-y, % change) 3.8 2.7 4.2 3.7 2.9 Real private consumption (y-on-y, % change) 2.1 3.1 2.6 1.6 1.9 Retail sales (y-on-y, % change) -0.3 3.3 6.7 2.6 1.2 Industrial production (y-on-y, % change) -3.8 11.1 6.9 1.6-0.1 Unemployment rate (%) 8.2 9.6 9.6 9.8 10.6 Gross fixed capital investments (y-on-y, % change) -1.1-0.3 9.0 0.3 1.8 Real net exports (EUR billion) -3.6-6.2-3.6 0.2 1.2 Export growth (y-on-y, % change) -6.8 12.2 7.7 3.0 1.9 Fiscal balance (% of GDP) -1.8-3.2-1.7-2.1-2.0 *forecast Atradius 2
Economic situation: Still better than many of its European peers Growth slows down Compared to many other European countries, the Polish economy is performing relatively well: with an Compared expected to growth many other rate of European 2.3% in 2012 countries, and 1.9% the Polish 2013. economy However, is this performing is still well relatively below 2011 s well: with Compared to many other European countries, the Polish economy is performing relatively well: with an expected robust an expected growth growth of 4.3%. rate of 2.3% in 2012 and 1.9% 2013. However, this is still well below 2011 s growth rate of 2.3% in 2012 and 1.9% 2013. However, this is still well below 2011 s robust growth of 4.3%. robust growth of 4.3%. Real GDP growth (Annual percentage change in real GDP; forecast for 2012 and 2013) After a 3.4% year-on-year increase in Q1 of 2012, GDP growth slowed to 2.3% in Q2 and 1.4% in Q3. This After a 3.4% After trend year-on-year a 3.4% is due year-on-year partly to lower increase in increase export Q1 of 2012, in Q1 demand of GDP 2012, from growth GDP the slowed growth Eurozone, to slowed but 2.3% to mainly in 2.3% to Q2 and in a Q2 weaker 1.4% and in 1.4% domestic Q3. in This Q3. trend economy: is due partly This to lower trend with is export due lower partly investments demand to lower from export and consumer the Eurozone, demand from spending but mainly the Eurozone, following to a weaker but the mainly government s domestic to a weaker imposition economy: domestic of with lower austerity investments economy: measures. and consumer with lower Domestic spending investments demand decreased 0.7% Q3 of 2012 after a 0.4% drop in Q2. These following the consumer government s spending imposition following of the austerity government s measures. imposition Domestic of demand decreased austerity 0.7% measures. in Q3 of Domestic 2012 after demand a 0.4% decreased drop in 0.7% Q2. These in Q3 downward of 2012 after trends a 0.4% are drop expected in Q2. These to continue into downward trends are expected to continue into 2013, but will be offset somewhat by an increase in government spending. 2013, but will downward be offset trends somewhat are expected by an to increase continue in into government 2013, but spending. will be offset somewhat by an increase in government spending. Contribution to GDP growth (Chain-weighted basis; forecast data edge 2012) Lower inflation in 2013 Atradius 3
Lower inflation in 2013 Inflation Inflation has been has has above been the above Eurozone the the Eurozone average average since since the start the the start of the of of the financial the financial crisis crisis in 2008, in in 2008, but but but is is now is now on a downward path on on and a a downward nearing the path Eurozone and and nearing average: the the Eurozone after 3.7% average: in 2012 after it 3.7% is expected in in 2012 it to it is decrease is expected to to to 2.9% decrease in 2013. to to 2.9% in in 2013. Consumer price inflation (Annual percentage change) Slow rise Slow in unemployment rise rise in in unemployment Unemployment Unemployment has remained has has remained stable throughout stable throughout 2012, 2012, at 9.8%, at at 9.8%, despite despite the the the moderating economic growth. The jobless rate growth. is up from The The its jobless 2008 rate low rate is of is up 7.1%, up from but its its 2008 is still low low below of of 7.1%, the Eurozone but but is is still still level below (see the the chart Eurozone below). level A (see (see further increase to 10.6% chart in 2013 below). is expected A further as increase economic to to 10.6% performance in in 2013 is dips. is expected as as economic performance dips. Unemployment rate (ILO uniform rate, percent) Interest rate cuts to to support growth During the the 2008/2009 credit crisis the the Polish currency depreciated sharply against the the EUR. However, since then, the the exchange rate rate has has been relatively stable (see (see chart below), with the the EUR per per zloty exchange rate rate fluctuating between 0.26 and and 0.22 (see (see chart below). There is is currently no no reason to to expect any any major currency fluctuation. Because of of the the current economic slowdown and and lower inflation, the the Polish central bank has has cut cut its its policy interest rate rate twice: in in November and and December 2012. It It now stands at at 4.25%, compared to to 4.75% in in September, and and further cuts cuts may be be made if if the the economy remains weak. Atradius 4
Interest rate cuts to support growth During the 2008/2009 credit crisis the Polish currency depreciated sharply against the EUR. However, since then, the exchange rate has been relatively stable, with the EUR per zloty exchange rate fluctuating between 0.26 and 0.22 (see chart below). There is currently no reason to expect any major currency fluctuation. Because of the current economic slowdown and lower inflation, the Polish central bank has cut its policy interest rate twice: in November and December 2012. It now stands at 4.25%, compared to 4.75% in September, and further cuts may be made if the economy remains weak. Exchange rate (midpoint spot price, euro per zloty) Public Source: IHS finances Global Insight are stable Public finances Public Overall, are finances stable the government s are stable financial position is stable and relatively comfortable. The budget deficit improved significantly in 2011: to 1.6% of GDP. While last October it was expected to decrease Overall, the Overall, government s further the in 2012, government s financial to 1% of position financial GDP, this position stable forecast is and has stable relatively since and been relatively comfortable. revised comfortable. downwards, The budget The to around budget deficit 2% deficit improved of GDP, significantly in 2011: improved as the to government 1.7% significantly of GDP. eases in While 2011: its deficit last to 1.6% October targets of GDP. to it maintain was While expected last growth. October Compared decrease it was further expected to other in countries to 2012, decrease to in 1% the of GDP, this forecast further region, has since Poland s 2012, been to revised 1% fiscal of deficit GDP, downwards, this still forecast satisfactory. to around has since 2% However, been of GDP, revised public as the downwards, debt government was already to around eases relatively 2% its of deficit high GDP, in targets to maintain as growth. 2007 the government (43% Compared of GDP) eases to and its other increased deficit countries targets to 53% in to the maintain 2011 region, (see growth. Poland s chart Compared below). fiscal deficit to other is countries still satisfactory. in the However, public debt region, was already Poland s relatively fiscal deficit high is in still 2007 satisfactory. (43% of GDP) However, and increased public debt to was 53% already in 2011 relatively (see chart high below). in 2007 (43% of GDP) and increased to 53% in 2011 (see chart below). Public debt and budget balance (Government debt and budget balance in percent of GDP) Increasing current account deficit Increasing The current current account account deficit deficit is expected to be around 5.5% of GDP in 2012: a small increase on 2011. The latest figures show that exports increased 3% year-on-year in the first half of 2012, while imports The barely current changed, account leading deficit to is an expected improvement to be around in the trade 5.5% deficit. of GDP Export in 2012: growth a small was increase due mainly on 2011. to The increased latest figures demand show from that Russia, exports Ukraine increased and 3% other year-on-year emerging markets. in the first The half current of 2012, account while deficit imports is barely financed changed, largely leading by portfolio to an improvement investment in in government the trade deficit. bonds Export and only growth in small was part due mainly by foreign to direct Atradius 5
Increasing current account deficit The current account deficit is expected to be around 5.5% of GDP in 2012: a small increase on 2011. The latest figures show that exports increased 3% year-on-year in the first half of 2012, while imports barely changed, leading to an improvement in the trade deficit. Export growth was due mainly to increased demand from Russia, Ukraine and other emerging markets. The current account deficit is financed largely by portfolio investment in government bonds and only in small part by foreign direct investment (FDI). As a result, Poland is dependent on foreign financing and remains vulnerable to changes in the sentiment of international financial markets. Current account balance (Current account balance in percent of GDP) Bond yields are quite low Thanks to the satisfactory growth rates and relatively good public finances, the government can Bond yields borrow are quite at reasonably low good rates on the financial markets. Indeed, the interest rates on 10-year Bond government yields are bonds quite have low decreased over the past two years, following the pattern of safe-haven Thanks to the Germany satisfactory (see chart growth below). rates While and relatively this position good could public fall finances, victim to the current government volatile can sentiment borrow of at reasonably good Thanks rates international to the investors, satisfactory financial markets. Poland s growth Indeed, prudent rates and fiscal the relatively interest policy good and rates robust public on 10-year economic finances, government the growth government should bonds enable can have the decreased over the past borrow government two years, at reasonably to following continue good the to rates borrow pattern on the of low financial safe-haven rates in markets. the medium-term Germany Indeed, (see the future. chart interest below). rates on While 10-year this position could fall victim to government the current bonds volatile have sentiment decreased of over international the past two investors, years, following Poland s the prudent pattern of fiscal safe-haven policy and robust economic growth Germany should (see enable chart the below). government While this to position continue could to borrow fall victim at low to the rates current in the volatile medium-term sentiment future. of international investors, Poland s prudent fiscal policy and robust economic growth should enable the government to continue to borrow Government at low rates in the bond medium-term yield future. (10-year government bond yields in percent per annum) Poland industries performance forecast December 2012 Bitte tabelle einfügen Poland industries performance forecast Atradius 6
Poland industries performance forecast December 2012 Agriculture Automotive/ Transport Chemicals/ Pharma Construction Construction Materials Excellent Good Consumer Durables Electronics/ICT Financial Services Food Machines/ Engineering Fair Metals Paper Services Steel Textiles Poor Bleak Atradius 7
If you ve found this country report useful, why not visit our website www.atradius.com, where you ll find many more Atradius publications focusing on the global economy, including more country reports, industry analysis, advice on credit management and essays on current business issues. On Twitter? Follow @Atradius or search #countryreports to stay up to date with the latest edition. Copyright Atradius NV 2013 Disclaimer: This report is provided for information purposes only and is not intended as a recommendation as to particular transactions, investments or strategies in any way to any reader. Readers must make their own independent decisions, commercial or otherwise, regarding the information provided. While we have made every attempt to ensure that the information contained in this report has been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this report is provided as is, with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, and without warranty of any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken in reliance on the information in this report or for any consequential, special or similar damages, even if advised of the possibility of such damages. Atradius Credit Insurance N.V Postbus 8982 1006 JD Amsterdam David Ricardostraat 1 1066 JS Amsterdam www.atradius.com