European Commission upgrades Polish GDP growth forecast
The Polish economy will likely grow by 3.2% in 2015 and then accelerate to 3.4% in 2016, the European Commission said in its February forecast, raising previous projections.
Economic growth for last year is estimated at 3.3%. A HICP deflation in Poland will likely persist until Q3 2015, bringing the average annual rate to -0.2%, according to the Comission.
At the same time Poland will enjoy a reduction of general government deficit from 3.6% of GDP in 2014 to 2.9% of GDP in 2015 and 2.7% in 2016, the European Commission forecasts.
"We forecast an improvement in public finance," the Commission wrote in its winter forecast. The fiscal improvement should come on the back of economic growth, while the mining sector restructuring constitutes some risk for 2015 and 2016 forecasts.
S&P upgrades Poland's credit rating outlook to positive
Poland's sovereign rating outlook has been revised from “stable” to 'positive' on steady economic growth, with rating affirmed at A- for foreign currencies and A for the local currency, Standard & Poor's said in a statement.
S&P said it expected economic growth in Poland would be broad-based, leading to a convergence of Polish incomes with those of wealthier EU states.
"The outlook revision reflects our expectation that income levels ... will rise consistently on the back of broad-based and balanced economic growth, thereby improving the economy's resilience and capacity to bear debt," the statement reads.
Poland's sound macroeconomic management, stable public finances, and moderate external financing needs also underpin growth prospects.
S&P said that the ratings on Poland remain supported by its strong, open, and competitive economy. “The economy benefits from a floating exchange rate regime and domestic capital markets that permit the government to finance itself in local currency at long-dated maturities”.
The rating agency said it expected Polish GDP growth to slow to 3% this year “due to the weaker growth of its trading partners and geopolitical uncertainties” before accelerating to an average 3.4%t from 2016.
S&P said rising wages should mean domestic demand replaces exports as an economic driver in time.
“While in the past the export sector was the main pillar supporting growth, we believe domestic demand will play a greater role over the medium term. Stronger wage growth and subdued inflation have fostered this trend by helping real incomes grow further. As a result, we forecast Polish GDP per capita will continue rising to $19,000 by 2018,” the agency said.
Poland keeps interest rates stable
Poland's Monetary Policy Council has kept interest rates unchanged at the Wednesday sitting, as the recent better-than-expected data as well as the January PMI index confirm a good condition of the Polish economy.
The council’s decision leaves the key reference rate at 2.00%, the deposit rate at 1.00% and the Lombard rate at 3.00%, levels set in a series of asymmetrical rate cuts in October.
However, the council may decide to cut rates by at least 25 bps in March, central bank NBP head Marek Belka told a news conference following council's February policy sitting.
"There are enough factors to incline the council to cut rates and there are enough council members inclined towards this," Belka said. Eventual easing "could be more" than the standard 25 bps, he added.
Polish financial system seen with high resilience to shocks – Central Bank
Polish financial system, including the banking sector, shows high resilience to shocks, even those relatively unlikely, also the appreciation of CHF should not pose a significant threat to the system, central bank NBP said in a report on financial system stability.
"According to NBP assessment, the resilience of the domestic financial system to shocks to the identified risks, also to those with low probability, is high," NBP said.
Those risks include the exposure to the sudden appreciation to the Swiss franc.
"NBP assesses that it will not be a significant threat to the stability of the Polish financial system," NBP wrote, but with the caveat that the impact will depend on the length and the scale of the CHF appreciation.
Polish official reserve assets up by 6.4pct in Jan.
Poland's official reserve assets increased by 6.4% month on month in January to EUR 87.93 billion from EUR 82.64 billion in December 2014, central bank NBP said in a statement.
The sharp increase in reserves expressed in EUR was mainly driven by the further appreciation of the US dollar against the euro, NBP's press office said. The reserves when calculated in USD actually edged down.
Poland's car production grows 14.5pct y/y in January
Poland's January car production increased by 14.5% in annual terms to 54,003 passenger cars and vans, automotive market research institute Samar said in its most recent report.
In monthly terms, production jumped 35.2%, the report showed.
Car production in FY 2014 reached 578,311 vehicles.
PKO BP bank & Grupa Azoty chemicals strike strategic partnership
Poland’s top lender bank PKO BP signed an agreement on strategic partnership with fertilizer producer Grupa Azoty, the first step in the bank's new goal of becoming the leading bank for Poland's agriculture and food sector, PKO BP said in a statement.
As part of agreement with Grupa Azoty, PKO BP will offer financing for Grupa Azoty clients, while the latter's distributors will start offering the bank's products. Additionally, the firms will conduct joint marketing campaigns.
PKO BP wants to focus on food producers with turnover of over PLN 500 million annually and at least double the number of such clients from the current 23 out of 115 operating on the market, the statement said.
Poland to launch power consolidation yet in 2015
The Polish government will launch the process of power sector consolidation yet this year, before the general election, but the process is unlikely to be completed in 2015, Treasury Minister Wlodzimierz Karpinski told reporters.
"We want to start the proper consolidation process in the energy sector yet this year, yet before the election," Karpinski said. "The process is very complex and rather won't be completed this year," he added.
The Ministry is currently in talks with analysts and interested parties over the final shape of consolidation, he said. "When the plan is ready, that's when we announce it."
The government is reportedly mulling merging PGE with Energa and Tauron with Enea and has already presented the plan to trade unions, according to press speculation.
The government is plotting its options for consolidation of the power sector in order to increase their competitiveness and investment capacity. The power sector is also expected to participate in saving the ailing coal mining industry.
Eurolot goes into liquidation
State-controlled airline Eurolot, a regional subsidiary of Poland’s flagship airlines LOT, will be shut down as of March 31, as business analyses indicated that the carrier will not be able to be profitable in the foreseeable future treasury ministry official Adam Ambrozik said.
Eleven of Eurolot's Bombardier planes will be returned to leasing firms and another ten transferred to LOT airline, the daily Puls Biznesu wrote.
EuroLOT said on its website it would continue operating its schedule until March 31. Passengers booked on flights after April 1 will either receive refunds or be switched to another airline.
The Polish treasury has a62.1% stake in Eurolot.
New supermarket chain joins the Fray
A new Polish-owned supermarket chain called Mila was launched Jan. 1. It specializes in fresh products such as meat, fruit and vegetables, pastries and baked goods.
The Mila brand belongs to the market-Detal company, which was founded in 1997. Until recently it was part of the POLOmarket group. On Jan. 1, it began operating on its own, as Mila, forming a new chain of stores. The company has 170 stores across the country and employs nearly 5,500 workers. The owner plans to steadily develop the chain by opening 30 new stores a year. The company has opened a new, 39,700-square-meter logistics center in central Poland, in Krągola near the town of Konin. The facility’s location in the center of the country enables convenient distribution of products nationwide. According to executives from the market-Detal company, the new supermarket chain is a response to the changing shopping habits of consumers in Poland. Artur Kasner, CEO and co-owner of market-Detal, said, “We clearly see a need for a store that will combine the advantages of shopping in a traditional store with the advantages of shopping in a discount store. We have identified the key categories that have been appreciated by our customers so far and in which we will continue to specialize, and these are: fresh fruit and vegetables, smoked meat products and meats, and pastries.” The company says it plans to splash out on marketing and promotion over the next few years to build consumer awareness of the new brand.