Gauging the financial climate

According to the Consumer Finance Market Barometer (Barometr Rynku Consumer Finance, KPF-IRG Barometer), the financial condition of the average Polish household has improved for the tenth quarter in a row. The KPF-IRG Barometer grew by 1.1 points to reach a record high of -31.9 points. However, the pace of growth has slowed in comparison with the last two years.

The KPF-IRG Barometer is an opinion poll-based tool for consumer-finance research designed by the Research Institute for Economic Development (IRG) at the Warsaw School of Economics, together with the Confederation of Financial Enterprises (KPF). The main areas with which the household-finance assessment is concerned are financial situation, long-term goods purchase, the general climate for saving and savings prognosis.

According to IRG's Dr Joanna Klimkowska, the four most dynamic influences on household prosperity are the construction, transport and FMCG industries along with the consumer market. "We expect further economic growth mainly in these four areas," she stated. However, experts expect the growth to be slightly less dynamic than in previous years. A very important predictor of the growth prognosis has to do with consumers' intentions to make further investments, which is lower in 2007 than it was in 2006.

The loan market, especially mortgages, will be developing further, says Dr Sławomir Dudek from IRG. He stresses that there is a lot of potential in this market, as over 21 percent of Polish consumers still prefer to take a loan from their workplace or families rather than from a bank. At the same time, the number of those who have never taken a loan and are not planning to do so rose from 41 to 46 percent, as compared with the last quarter of 2006.