Republic of Poland: Selected Issues Paper

IMF Staff Country Reports, May 14, 2010

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Republic of Poland: Selected Issues Paper

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Bibliographic details

• Published: May 14, 2010
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781455202553.002

Summary

• The Selected Issues paper on Poland underlines that as the only European Union economy to avoid outright recession during the crisis, Poland is likely to attract renewed risk appetite.
• Poland could become one of the main recipients of capital inflows.
• This could lead to excessive exchange-rate appreciation, which would undermine competitiveness.
• The volatility of capital flows into Poland has been lower during both the boom and crisis periods, in part owing to timely introduction in the boom period of countercyclical macroprudential measures.

Major themes and analysis

• Balance of payments and Capital inflows
  • Poland is vulnerable to renewed capital inflows due to its relative resilience during the crisis.
  • Excessive inflows risk triggering exchange-rate appreciation and competitiveness losses.
• Financial sector and macroprudential framework
  • Lower volatility of capital flows during boom and crisis periods is attributed in part to countercyclical macroprudential measures introduced during the boom.
• Fiscal and public finances
  • The paper addresses Fiscal policy, Fiscal stance, Public debt, and Public financial management (PFM) as key subjects.
• Foreign exchange and household balance sheets
  • Topics include Foreign exchange exposure, FX mortgage issues, and related balance-sheet vulnerabilities.
• Labor market and broader macro indicators
  • Coverage includes GDP, labor market conditions, and interest rate dynamics.

Policy implications and recommendations (implicit from content)

• Monitor and manage capital inflows to avoid excessive exchange-rate appreciation that would undermine competitiveness.
• Maintain or strengthen macroprudential measures that can reduce volatility of capital flows and buffer the financial system during boom and crisis periods.
• Address FX exposures in household and banking sectors to limit balance-sheet risks associated with foreign currency liabilities.

Content in this bundle

• Republic of Poland: Selected Issues Paper; IMF Country Report 10/119; April 16, 2010
  • Republic of Poland: Selected Issues Paper; IMF Country Report 10/119; April 16, 2010 (Markdown version)
  • Republic of Poland: Selected Issues Paper; IMF Country Report 10/119; April 16, 2010 (PDF)