Polish public debt to GDP may rise by 0.47 pp in 2016 on slower GDP growth

Polish public debt to GDP would rise 0.47 pps above plan in 2015, should GDP growth turn out 1 pp lower than assumed, Poland said in its debt management strategy 2016-2019.

A 10% weakening of the zloty versus the FX basket would result in public debt increasing by 1.55 pps, the document shows.

In the case of PLN 10 bln higher borrowing needs, debt would edge up by 0.54%.

PUBLIC DEBT SENTITIVITY TO SLOWER GDP GROWTH, WEAKER ZLOTY & HIGHER BORROWING NEEDS:

September 2015
Year Effect of 1 pps Effect of 10% Effect of PLN 10 bln
GDP slowdown zloty weakening higher borrowing needs
2016 0,47 1,55 0,54
2017 0,94 1,51 1,04
2018 1,39 1,45 1,50
2019 1,84 1,42 1,90

Poland expects its domestic measure of public debt-to-GDP to expand to 49% in 2016 and 2017 before tailing off, Poland’s debt management strategy for the years 2015-2018 showed.

Public debt forecasts have risen notably across the full forecast horizon from the debt management strategy released one year prior.

A public finance sector debt above 48% of GDP by the Polish definition triggers a reduction in the rate of growth in Poland’s spending cap by 2 pps, according to the terms Polish public finance law.

DEBT AND DEBT SERVICING COST MEASURES (SEPT 2015 UPDATE)

September 2015 2014 2015E 2016E 2017E 2018E 2019E
Treasury debt (PLN bln) 779,9 828,6 883,5 938,8 983,8 1038,1
% of GDP 45,1% 46,1% 46,8% 47,1% 46,3% 45,9%
Public debt (PLN bln) 826,8 870,4 924,7 978,5 1021,9 1074,4
% of GDP 47,8% 48,4% 49,0% 49,0% 48,1% 47,5%
Gen gov’t debt (PLN bln) 867,0 915,4 977,7 1039,8 1097,7 1152,2
% of GDP 50,2% 51,0% 51,8% 52,1% 51,6% 50,9%
Treas debt fin. cost (PLN bln) 34,5 32,3 31,8 31,1 – 32,2 32,1 – 33,3 33,7 – 34,9
% of GDP 1,99% 1,80% 1,68 1,56 – 1,61 1,51 – 1,57 1,49 – 1,54
– domestic 24,8 22,1 21,7 21,8 22,3 23,9
– foreign 9,6 10,2 10,1 9,3 – 10,4 9,8 – 11 9,8 – 10,9

DEBT AND DEBT SERVICING COST MEASURES (SEPTEMBER 2014 UPDATE)

September 2014 2013 2014 2015E 2016E 2017E 2018E
Treasury debt (PLN bln) 838,0 759,5 804,8 832,1 869,1 899,3
% of GDP 51,2% 44,8% 45,4% 44,3% 43,7% 42,4%
Public debt (PLN bln) 882,3 807,5 850,0 880,1 915,2 943,1
% of GDP 53,9% 47,7% 48,0% 46,9% 46,0% 44,5%
Gen gov’t debt (PLN bln) 934,6 848,5 899,3 940,5 985,3 1028,6
% of GDP 57,1% 50,1% 50,8% 50,1% 49,5% 48,5%
Treas debt fin. cost (PLN bln) 42,5 36,2 32,3 31,7 – 33,1 32,5 – 33,8 33,6 – 35,0
% of GDP 2,60% 2,14% 1,82% 1,69% – 1,76% 1,63% – 1,70% 1,58% – 1,65%
– domestic 32,3 11,8 22,1 22,9 23,8 24,1
– foreign 10,1 2,14 10,2 8,8 – 10,1 8,7 – 10,0 9,5 – 10,9

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