The Menace of Recession?

PLN 500 for Families

PLN 500 for Families

According to reports, the money provided to families as part of the “Family 500+” programme, launched by the Polish government on April 1, is quickly returning to the stock market. However, an increase in retail sales during the first half of 2016 has not been as significant as was expected. The problem lies with deteriorating market moods amongst entrepreneurs, fewer investments by business and a poor situation on the construction market. Experts assume that this is why the Polish GDP annual growth rate projected in this year’s Finance Act will likely not be achieved. “Following the first half of 2016, we have experienced economic growth that would be the pride of many western European countries, however, current Polish GDP is still too far from the 3.8% projected in the Finance Act for 2016,” said Grzegorz Ogonek of XTB. He continues: “500+ has proved to be driving retail sales but it is not capable of carrying the entire economy”. The XTB expert also expressed his surprise and deep concern over the deteriorating PMI in Poland. “It seems like half of Poland’s entrepreneurs are expecting an economic slowdown,” Ogonek said.
money.pl

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Deflation Continues

Good News Ahead?

Good News Ahead?

According to data from the Central Statistical Office of Poland (GUS), the prices of goods and consumer services fell by 0.2% in December 2015 compared to November 2015. The rate of annual deflation was 0.5%. Deflation is a long-term decrease in the prices of goods and consumer services. In practice, it means that the prices of the products we buy drop month after month, so the purchasing power of money increases i.e. we can buy more for the same price, than in the previous month. Unfortunately, the drop in prices does not include all goods and services. For example, in December 2015, according to GUS, the price of clothing and footwear dropped, but at the same time there was a slight rise in the price of services (by 0.2%). When it comes to our home budget, this continuing decrease in prices is beneficial because we spend less money on a day-to-day basis. It is also a good news for those who do not save money in interest accounts. It is also worth mentioning that long-term negative inflation (deflation) has a negative influence on the economy. Entrepreneurs produce less, prices remain unchanged or fall, profits drop; and companies want to save, rather than invest, which often results in a decrease in the employment rate.
money.pl

Polish Exports Increasing

Flying the Flag

Flying the Flag

Exports from Poland will rise 5-6% in the near future. By 2030 exports will be double that of today. According to reports, Poland’s chief trade partners are currently Germany, Great Britain and France. However, markets in Turkey and China and other Asian countries, where exports from Poland are set to rise by 10% every year, are also potential game changers. The main products exported from Poland will still be industrial machinery and transportation equipment. However, the make-up and proportions of exports from Poland will change.
rp.pl

Poland Has Lowest Taxes?

Lowering Tax

Lowering Tax

“A change in tax thresholds will happen sooner or later, but it must be aligned to the needs of the economy,” according to the Minster of Finance Mateusz Szczurek. The head of the Ministry of Finance avoided any specific declarations of when a cut might be possible, but pointed out that “more will be known when the draft budget for 2016 is accepted”. Szczurek argued that in comparison with other EU countries, Poland is a state with some of the lowest taxes. “Taxes to GDP in Poland are slightly below 31%, which is 8% less than the average in the EU. We actually collect a relatively small amount of money in taxes in relation to the size of the economy,” he stressed.
onet.pl

Poland Imports Electricity

Importing Power

Importing Power

In 2014, Polish power plants produced less electricity than was consumed by domestic consumers. This was the first time since Poland’s political and economic transformation (in 1989) that the country was a net importer of electricity. The main reason was cheaper electricity from Poland’s neighbours, which has become a serious challenge for the country’s doctrine of ‘electricity independence’. Sweden, which is connected to Poland by cable along the bottom of the Baltic sea, provides large amounts of energy from hydroelectricity plants. Swedish energy is 25% cheaper than electricity on the Polish Power Exchange, according to the March “Power and Fuels” report produced by Energy Solutions. Energy can also be bought significantly cheaper on the German EFX power exchange in Leipzig, as much as 20% cheaper than in Poland. This is a result of the high number of power plants with low production costs that use renewable sources, nuclear power and lignite. The fast-growing share of green energy on the market of Poland’s western neighbours (subsidised by German consumers, for example) will mean the continued lowering of energy prices in European power markets. The Polish and Lithuanian energy bridge, which is planned to start on December 2015, may also contribute to the lowering of prices on the Polish market, as it will increase the possibility of energy import from Scandinavian countries. Contrary to what one might expect, cheaper imported energy has not yet meant a lowering of prices for consumers.
energetyka.pb.pl

Flirt Trains Revealed

Time to Flirt

Time to Flirt

PKP Intercity is testing one of 20 Flirt trains on a special track in Żmigród. The new trains have been manufactured in partnership between the Swiss company Stadler and Polish Newag. Furthermore, the manufacturers have ensured the public that the whole production process was undertaken in Poland. The cost of 20 Flirt trains will be PLN 1.6 billion. However, the manufacturers are obliged to service the trains for 15 years within this price. The purchase was possible thanks to EU funds with as much as 70% of the price covered by the European Union. The trains are equipped with 360 seats for passengers, two lifts for persons with disabilities as well as air conditioning and sockets for mobile devices. The trains will be able to accelerate to 160 km/h in accordance with regulations, but the technical maximum speed is 185 km/h. Training on how to operate the new trains will soon begin for drivers and instructors who will pass instructions to 250 employees of PKP IC. The Flirts will depart on 15 December 2015.
wyborcza.pl

India is the New Direction

Rupees to Poland?

Rupees to Poland?

On 26 March 2015 discussion panels entitled “New export directions” and “Export chances for Polish companies” took place in Business Link Warszawa. The participants included Ryszard Sznajder, president of the Polish-Indian Chamber of Commerce; Michael Dembiński, chief advisor of the British-Polish Chamber of Commerce; Dariusz Karwowski, chief project manager of the Polish Information and Foreign Investment Agency (PAIiIZ) and Piotr Soroczyński, chief economist at Export Credit Insurance Corporation (KUKE). Ryszard Sznajder mentioned that most Polish companies are still not interested in cooperating with India and the trade balance is still low despite its expansion, which clearly illustrates this attitude. Furthermore, Polish enterprises should use the fact that Indians are generally positive Poland. Sznajder encouraged Polish business to show an interest in the Indian market and its almost unlimited possibilities. Other topics covered were the Russian embargo on food imported from Poland, which started another discussion on how to support exporters. There was also a discussion on new market goals and the promotion of Polish exports in China.
piig-poland.org