Seeing positives in negative numbers
Poland's current account took a nosedive month-on-month in May to a EUR 724 (zł.2,982) million deficit from a EUR R647 (zł.2,665) million surplus in April, shocking analysts, who had been expecting a surplus of some EUR 100 (zł.412) million.
The surprising figures come as a result of much higher-than-expected imports. May's foreign trade deficit came in at EUR 386 (zł.1,590) million, down from a surplus in April of EUR 107 (zł.441) million, while economists had forecasted a monthly trade deficit of just EUR 68 (zł.280) million. Though exports fell 9.6 percent and imports two percent month-on-month, the yearly numbers show a significant rise in both figures, of 9.9 percent and 11.9 percent respectively.
That could be good news for those expecting an extended slowdown after Poland's poor economic showing in the first quarter. The rise in imports seems to signal an increase in demand, something economists have said was key if Poland was to emerge from its current economic lull.
"Imports rising at a 12 percent annual clip show that domestic demand must be growing, too. That means we may be dealing with a short-term and not a sustained economic slowdown," economist Piotr Bielski of Bank Zachodni WBK in Warsaw told the Dow Jones news service.
Also contributing to the slide was a sharp drop in interest and investment income, from April's deficit of EUR 215 (zł.886) million to EUR 846 (zł.3,485) million in May.
"Analysts expected Polish companies to make their main dividend payouts in June, not May. The fact they were earlier this year means current account performance should improve in coming months," said Bielski.
The surprising figures come as a result of much higher-than-expected imports. May's foreign trade deficit came in at EUR 386 (zł.1,590) million, down from a surplus in April of EUR 107 (zł.441) million, while economists had forecasted a monthly trade deficit of just EUR 68 (zł.280) million. Though exports fell 9.6 percent and imports two percent month-on-month, the yearly numbers show a significant rise in both figures, of 9.9 percent and 11.9 percent respectively.
That could be good news for those expecting an extended slowdown after Poland's poor economic showing in the first quarter. The rise in imports seems to signal an increase in demand, something economists have said was key if Poland was to emerge from its current economic lull.
"Imports rising at a 12 percent annual clip show that domestic demand must be growing, too. That means we may be dealing with a short-term and not a sustained economic slowdown," economist Piotr Bielski of Bank Zachodni WBK in Warsaw told the Dow Jones news service.
Also contributing to the slide was a sharp drop in interest and investment income, from April's deficit of EUR 215 (zł.886) million to EUR 846 (zł.3,485) million in May.
"Analysts expected Polish companies to make their main dividend payouts in June, not May. The fact they were earlier this year means current account performance should improve in coming months," said Bielski.
