Poland healthy in 2009

Governments will play key role in the current financial crisis bailing out their economies, according to Merrill Lynch Global Wealth Management's chief investment officer Gary Dugan. However, Poland's strong fundamentals are what will get the country through 2009 and not government involved, since according to Dugan, the government doesn't need to intervene.

Shares in European stock markets have dropped 17 percent since the end of September, investors are looking for low-risk investments and government's are bailing out financial institutions. "Things should have never gotten this bad," said Dugan. However, Dugan believes that each country should own up to their problems, resolve them and move forward. According to Dugan, the best thing the US did was own up to the problem taking 18 months to fix it.

"Global inflation's beaten down. What we need is a big surprise," said Dugan adding that the surprise will come from the government. "We are going to rely on government." With current household and corporate debt rising, consumers will tend to save more money than spend it. The current pace is concern for companies that will see low growth results in the next years. "This under spending needs to be replaced with government spending," said Dugan.

Polish economy's expected to slow down as well with predictions for GDP growth ranging from Citi Handlowy at 2.6 percent to Polish government's prediction of 4.8 percent. Merrill Lynch has estimated that Polish economic growth will hover around two to three percent. "There's great deal of confidence in the consumer spending power," said Dugan. "Poland has held onto that confidence." He believes that the Polish economy is well shielded and won't feel the same effects. The labor market may feel some effects, but it will be strong against CEE countries.