Various estimates of the impact on economic growth Brexitu Polish predict the slowdown from 0.2 to 0.5 percentage points. GDP. This effect certainly unfavorable, but not yet dramatic. In this case the Ministry of Finance will stick to the path of the budget deficit below 3 per cent. GDP. The scale of the uncertainty about the effects of Brexitu practically determines that there will be a reduction in VAT, and the only large items of expenditure will be 500 plus program. Next year it will be almost 6 billion zł more expensive than this, because it will run throughout the year. Virtually zero diminish the chances of increasing the amount of free, what the government he intended to put 2018. Until the introduction of a new system of unified tribute. Into question the possibility of lowering the retirement age in the next year. – In a situation in which it is Brexit, and it is not known whether it will be a domino effect, what will be the reaction of other countries, which the EU will emerge from this, you have to be very careful. If you treat yourself to a costly reform, and many investors come to the conclusion that the EU is not a safe place to invest, this growth could sit down – notes Jakub Borowski, chief economist at Credit Agricole.
Situation may change if the effects Brexitu prove to be much more severe than analysts estimate. Such a scenario can happen if the recession in the British economy will fall and will follow it in Europe. If it turns out that the economic growth will amount to no more than 3 per cent. And 1.5 per cent., The government will have to consider whether further stick to fiscal discipline and cut expenses, for example. 500 plus. And the latter for political reasons can be difficult. And decisions in this case probably will be taken not in the building at ul. Kielce, but Ujazdowskie Avenue in the Prime Minister’s Office and on the street. Novgorod, where the offices of head of the party. Therefore, the most important budget decisions will probably sank in September, when the government will finalize work on the project budget and will be a little more clear what would be the economic consequences Brexitu.
The first reaction of the Ministry of Finance was the appeal scheduled for today auction of Treasury bonds. MF does not want to sell the securities at low prices – and so would probably result listings. The bond market rozchwiał how other assets. Yield on 10-year Polish bonds soared on Friday to 3.23 percent. with 3 percent. the day before.
Ministry can afford to cancel the auction. So far it financed 70 percent. borrowing needs for this year. Resort boasts that it has accumulated a sizable nest-egg of 60 billion zł. That it provides peace of mind in the current budget financing. The more that the results of the budget after May are good: in the end reflected the proceeds from VAT. After a weak February and March and April average in May, revenues from VAT were up nearly 17 percent. higher than last year. This is the second – after January – so a good month in this regard. Calm MF stems also from the fact that at any moment the Polish National Bank will pay to the state coffers 8 billion zł from last year’s profit. This will further improve liquidity, the money from the National Bank of Poland as a whole are going to finance the budget deficit.
– Now the market is dominated by negative emotions, because Brexit was a surprise for investors. There is no need to measure up to these emotions, since there is no financial compulsion. Although the reaction of the bond market, and so was quite mild, comparing it to the stock exchange and currency – says Grzegorz Maliszewski, chief economist at Bank Millennium.
There will be a reduction in VAT, declining an opportunity to increase the amount of free
How long MF can do without additional emissions? With such a large liquidity cushion (60 billion zł) can easily repay bonds maturing in July and August (13.6 million zł) and bills with maturity dates in August and September (4.8 billion zł). Another large redemptions fall in October (bonds – 22.4 million zł) and November (vouchers for 1.7 billion zł).
– By September, MF can cope without issuing new bonds taking into account the payment of the NBP, theoretically survive may also be in october, although the situation will not be as comfortable as it is today – says Maliszewski.
but if it was really bad, MF has another ace sleeve: a flexible credit line (FCL) from the International Monetary Fund. Polish agreement with the IMF signed in 2009., At the height of the financial crisis. She was to be a confirmation that the assessment of the IMF, our economy is immune to the crisis, and Poland conducts a responsible policy and is a leader in the region in this respect. According to a recent agreement signed with the IMF in January of this year, Poland has the right to use the line with a limit of 13 billion SDR – units of account of the IMF – are equivalent to about 18 billion dollars.
Brexit may have impact on another strategic area of economic policy: the implementation of the so-called difficult. Morawiecki plan, which envisages increase domestic investment. The first reason: the British exit from the European Union means uncertainty in the so-called. economic environment, at least in the initial phase. Even if the relationship with the British Polish companies do not worsen and it will not affect the outcome of foreign trade, it will affect the propensity to invest. Polish entrepreneurs using money: deposits of companies is now 242 billion zł. This is not access to finance is a problem in generating investment, and the lack of certainty whether the matter in the Polish and EU economy moving in the right direction. After Brexicie this trust will be less. But Deputy Prime Minister Morawiecki says DGP that the government will want to be active (the whole interview below).
– Sphere uncertainty will be increased from this point of view, the uncertainty of investment, which translates into GDP will continue. We will do everything to win investors from around the world – emphasizes Deputy Mateusz Morawiecki.
The second reason concerns the investment: exit the UK from the EU means the absence of its contributions to the EU budget. Which can lead to a deep correction of the current financial perspective. In the design of the financing plan Morawiecki 480 billion zł from the European Funds is one of the most serious sources of money.
Ministry of Development, however, is trying to reassure. According to the ministry the money from the EU perspective for the Polish are not threatened because while Britain did not negotiate the conditions of the output, apply the old treaties.
The EU needs a real compromise
Do not you afraid that the effects Brexitu negative impact on your plan?
Plan Responsible Development is so multi-threaded planned expansion potential of the Polish economy that is not dependent on the decision of the British. It affects mainly to geopolitical risk. The EU must return to rethink its rules of operation. It is clearly visible today. The result of the referendum was a warning signal for the entire European Union. While the plan for Responsible Development is being developed at a rapid pace. In the five months from its announcement it seems to me that we have done more than our opponents for five years. We have made many concrete things that will show in the near future.
But one of the pillars of the plan are to be private investment. Brexit increases uncertainty. Does not affect the decisions of investors?
Sphere uncertainty will increase, and from this point of view, the uncertainty of investment, which translates into GDP, will continue. Besides, all the time we are at that moment. We will do everything to win investors from all over the world. Encourage investment in our foreign capital, but also Polish, because the accounts of our businesses is more than 200 million zł, which you can invest.
What economic policy should be a response to perturbations after Brexicie?
As for Poland, it should it be the policy that we, that is a reasonable budgetary and financial policy, but at the same time taking care of our interests in the EU. We have enormous challenges of climate policy, energy, and this is part of economic policy, which must be properly conducted. In contrast, when it comes to such a policy in the EU is a very broad topic for the entire conversation. Certainly the EU has to rethink itself, or the way economic decisions are appropriate. We as a weaker country that does not have such influence in Brussels, very often we are affected by the Directive and the Regulation on whose announcement we have no influence or it is small, and we surprised them. An example is the directive antynawozowa or the posted workers. In this case, I was able to organize a coalition of 11 countries and begin the yellow card to the European Commission. You can see that the European institutions will have to think deeply approach to economic policy.
Pan emphasizes political contexts Brexitu. What we propose politically and how our voice will be seriously listened to the old Union?
It is important to know that the process of law-making in the EU, which has a huge impact on the economic situation of individual member states must be based on genuine compromise, and not just stronger, or more developed countries. Such countries stronger economically have greater influence in the EU and affect the shape of the legislation, which lies primarily in their interest. We are a country on the achievements and need of development impulses lie in our interest. The best example is the issue of free movement of services, which has been recorded yet in the Treaty of Rome as a canon of the EU, then still the European Economic Community, but today went unanswered. Freedom of movement of services is in our interest, countries that have hungry success of companies that are able to perform temporary services in other Member States. This freedom of services is not observed, but the freedom of the Treaty of Rome, which work in favor of the more developed countries, such as. Freedom of movement of capital, people and goods, great work all the time. These countries still operate in their interest.
We are for these countries a serious partner, or after Brexicie prevail fondness for the old EU?
and before that, and after that we are a partner such that a position wywalczymy. You can not go to Brussels with a white flag, which does not mean that you have to ride with red sheets as a bull. You have to go there with the white-and-red flag, firmly defending their interests, understanding that we are also representative of the developed countries below. ©?
Interview by Grzegorz Osiecki
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