Worse indicator, but relatively good economic situation in Poland

(Geralt, CC)

Due to numerous risks emerging in most economies of the world, including the European economies, there is little chance of a significant acceleration of economic growth above 4 per cent per year. Compared with other EU countries, however, Poland is looking pretty good. Faster growth was only recorded in Ireland and the Czech Republic, while Romania, Slovakia and Sweden achieved GDP growth rates close to Poland’s in 2015.

Out of the eight components of the index, three improved in March in relation to the value from the month before, one remained unchanged and four deteriorated.

The influx rate of manufacturers’ new orders decreased. The shrinking of the portfolio of export orders is of special concern. “We have observed this phenomenon since the spring of last year, and since October 2015 it has been gaining momentum. On the one hand, the depreciation of the zloty improves the attractiveness of the Polish exports offer, while the widening and diversification of sales markets in recent years increases the chances of maintaining high export growth rates. On the other hand, the deterioration of productivity, which has been taking place for nearly a year now, threatens our ability to maintain competitiveness of the Polish exports in the longer term, especially if the zloty begins to appreciate,” comments Maria Drozdowicz from BIEC.

Along with the reduced growth rate of new orders, stocks of finished products increased slightly. The results of the surveys indicate, however, that companies are not maintaining excessive stocks, which allows them to reduce costs.

This is reflected in the assessments of the financial condition of enterprises in the manufacturing sector. Since the autumn of last year, there has been a gradual drop in the number of companies which have a negative assessment of the condition of their finances, and an increase in the number of companies feeling an improvement. Industries associated with exports, such as furniture makers and the car industry, evaluate the state of their finances the most favourably, while clothing manufacturers have the worst assessments.

(Infographics: Bogusław Rzepczak)

As in the previous month, the assessments of the overall economic situation have worsened. Entrepreneurs are increasingly feeling the acute effects of not only the weak economic conditions globally, but also the instability of domestic conditions associated with the economic policy.

The slight improvement on the Warsaw Stock Exchange which occurred in the last month does not change the general picture. The downturn has lasted since the second half of last year. During this time, the basic index – WIG – has lost more than 20 per cent. This means a reduced inflow of capital that could be used for investment improving the competitiveness of companies’ commercial offers.

Despite persistent deflation, salary increases and stabilization on the labour market, consumers are not exhibiting much interest in bank loans. Consumer surveys indicate that the group of people who are not planning the purchase of important household goods in the near future is over 30 per cent larger.

In real terms, the M3 money supply grew slightly slower than in the previous month. There is less money on the side of corporate deposits and an increase on the side of household deposits. This was associated with additional pay-outs to staff from the profits of the conducted business activity.

(Geralt, CC)

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