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Poland Country Risk Report Q4 2018

Poland Country Risk Report Q4 2018

Poland's economic growth outlook will remain robust over the coming years, despite peaking in 2017. A tightening labour market will be positive for household consumption, but will start to drag on economic activity as employment growth slows and labour shortages start to impede firms' ability to expand production.

Poland's strong macroeconomic backdrop will prevent fiscal slippage, despite various expansionary policies, with the budget deficit remaining below 3.0% of GDP in 2018 and 2019. However, pro-cyclical stimulus will leave the government less well equipped to counter any unexpected demand shocks.

The National Bank of Poland is underestimating inflation risks in our view, and will be forced to start tightening monetary policy in 2019. We forecast the policy rate to reach 1.75% by end-2019.

The rift between Poland and the EU regarding Warsaw's controversial judicial reforms and rejection of EU-wide migrant relocation quotes will widen over the coming quarters, given the government's unwillingness to give in to EU demands. This will increasingly isolate Poland on the European level and may lead to the country being stripped of its voting rights in the European Council.

Key Risks


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Polish Domestic Demand Driving Growth
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
External Trade And Investment Outlook
Reduced Near-Term External Financing Risks For Poland
Outlook On External Position
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: TOP 5 GOODS EXPORTS, 2017
TABLE: TOP 5 GOODS IMPORTS, 2017
Monetary Policy
Polish Inflation Yet To Warrant Tightening
TABLE: MONETARY POLICY FORECASTS
Fiscal Policy And Public Debt Outlook
Poland's Share Of FX-Denominated Public Debt To Fall
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
TABLE: MAIN EXPENDITURE AND REVENUE CATEGORIES
Poland Country Risk Q4 2018ContentsCurrency Forecast
PLN: Investor Inflation And Rates Outlook To Weigh On Polish Zloty
TABLE: FITCH SOLUTIONS CURRENCY FORECAST
10-Year Forecast
The Polish Economy To 2027
Growth To Slow As Economy Matures
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
EU Threats Unlikely To Alter PiS Stance Ahead Of Local Elections
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
EU Tensions Pose Risk To Future Integration
Global Macro Outlook
Fewer Negative Surprises, But Trade Risks Rising
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: POLAND – MACROECONOMIC DATA AND FORECASTS

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