Despite contradictory export figures, April C/A deficit declines
Though economists sighed with relief that the current account (C/A) in April shrank to its lowest level since October 1999, most had hoped they'd be answering questions about an upswing in exports.
Instead, an unusual turnover in unregistered cross-border trade also known as "suitcase trade," which is mostly conducted at bazaars seems to have taken the C/A shortfall down to $819 million in April compared with March's alarming $1.34 billion.
"We hoped to get a slower current account for April, but in a different structure," said Dariusz Filar, Bank Pekao's chief economist. "Unfortunately, it wasn't due to high exports because, in fact, exports came down from March."
National Bank of Poland (NBP) statistics show $2.4 billion earned from Polish exports in March vs. April's $2.1 billion. Statistics from the Central Statistical Office (GUS), though, show exports up 9.2% in the first three months of 2000 in dollar terms and 23.8% in euro terms. An ongoing debate among Poland's economists centers on which figures are accurate. NBP data relies on payments from exports deposited in banks while GUS data draws conclusions based on customs documents.
"I prefer to follow NBP data because they simply tell me what the real income received from exports is," Filar said.
James Owen, an economist with SG Bank, disagreed with the NBP figures.
"I find the NBP numbers completely implausible," he said, explaining that exports could not be down 10% in an economy that has been growing around 5% compared to last year. "My judgement is that the GUS numbers are more reliable for (the export/import) component."
As for April's improvement in the C/A deficit, Owen said, "I think that the trend is probably moving toward stabilization and recovery."
Another good indication that the C/A figures are indeed better, Filar said, is that imports which cause the gap to widen when exports are much lower were down approximately $500 million from March.
The C/A deficit currently consumes 8.2% of gross domestic product (GDP), down from an all-time high of 8.3% in March. Since the beginning of this year, the combined deficit grew to $4.33 billion from $3.18 billion during the same four months of 1999.
The zloty strengthened on the C/A news, going from 4.365 to the dollar to 4.357 immediately after the figure was released.
But Filar said the currency's fair weather could become stormy if the government doesn't resolve its coalition crisis soon.
