Will economic crisis hit Poland?

In the midst of the global financial crisis, Poland's economy is forecast to grow by almost 1 percent. According to business economists and the Economist magazine, Poland likely will be the only European country with a growing gross domestic product in 2009.

The rapid growth of the Irish economy has been closely studied in Poland, writes COLM KEENA , where the global recession is being kept at bay

southernThreads: 116 Posts: 10,957 Joined: May 17, 07	Oct 28, 08, 05:23 / #
Or is its economy so strong it will not suffer?

szarlotkaThreads: 14 Posts: 3,349 Joined: Feb 20, 07	Oct 28, 08, 05:25 / #
southern: Or is its economy so strong it will not suffer? No country is an island in the global economic sea, well apart from North Korea maybe. The question for Poland would appear to be slow down or recession

dcb	Edited by: dcb Oct 28, 08, 06:32 / #
In the worst secenario Poland is going to have 2-3% GDP incearse in 2009.

time meansThreads: 9 Posts: 2,306 Joined: Apr 21, 08	Oct 28, 08, 06:38 / #
j p morgan paints a grim picture of polish economy.see warsaw business journal. im afraid we are all in for a rocky ride.

szarlotkaThreads: 14 Posts: 3,349 Joined: Feb 20, 07	Edited by: szarlotka Oct 28, 08, 06:45 / #
dcb: In the worst secenario Poland is going to have 2-3% GDP incearse in 2009 I would be wary of scenarios painted on data less than a week old right now

ParisJazzThreads: 2 Posts: 196 Joined: Oct 23, 07	Oct 28, 08, 09:00 / #
southern: Or is its economy so strong it will not suffer? Early days. A lot of the real figures are hidden under piles of jargon and we may not know the real situation until it is too late. Problem is a lot of banks, and governments, are so much leveraged that a seemingly small drop in the market could bring them down. Lehman's had assets of about $630 billions and liabilities of about $600 billion, making a net value of $30 billion. Now that is high leveraging as a mere 5% drop in its assets value would wipe out its net value. The main problem facing countries outside the main currency zones (USD, EUR, GBP, JPY, CHF..) is financing short term debt, due up to end 2009. Everyone is running for hard cash these days but the few who are willing to shoulder debt, would rather have it in one of the above currencies as opposed to zloty or forint, hence the possible need for IMF support. PJ

Polonius3Threads: 1,005 Posts: 4,834 Joined: Apr 11, 08	Oct 28, 08, 19:02 / #
Slovakia was allegedly protected from the crisis because it is about to adopt the euro. What about Britian? it has remained outside the euro zone. Is it in that much worse shape than France ofr Germany?

ParisJazzThreads: 2 Posts: 196 Joined: Oct 23, 07	Oct 29, 08, 08:36 / #
Polonius3: What about Britian? in 1992 Georges Soros made huge bets against the sterling until Britain pulled out of the exchange rate mechanism and forced John Major to devalue the pound. The UK is not immune. But early days, so we all have to wait to see. However, with Gordon Brown hell-bent on borrowing and spending his way out of the recession, this does not bode very well. PJ

southernThreads: 116 Posts: 10,957 Joined: May 17, 07	Oct 29, 08, 09:29 / #
Why economic crisis hit Hungary so hard but not Poland?It seems that new EU countries have quite a few differences.Who is going to collapse next?Maybe a balkan country or...

ParisJazzThreads: 2 Posts: 196 Joined: Oct 23, 07	Oct 30, 08, 07:06 / #
southern, whenever you read things like a country is in crisis, that simply means the country has been living way beyond its means it that its politicians have been throwing money recklessly left right and center. Any country can run a balanced budget and eventually repay public debt but that wont get the politicians any votes. Ukraine is a case in point. In the early 90s it has virtually no foreign debt and even afterwards when Yushchenko was running the local central bank, he was a model of conservatism and kep external debt under control. As of Oct. 23, 2008; Ukraine has $100 billion in total debts, 80 percent of which is corporate debt. A 53% increase year on year (bloomberg). That basically means Yushchenko has authorised a massive expansion in external debt in the hope of getting political credit for a short term improvement of the economy. It obviously didn't work. Inflation is way beyond 30% and the hryvnia is in free fall. Now as for Hungary, it has been running huge deficits for years and inflation is endemic. They somehow managed to reign into deficits recently but only just about. Poland, in comparison, has been a model of sound economic management. Another reason of running into trouble is because emerging market corporates and governments would rather borrow abroad at extremely lower rates compared to their local high rates. Problem is, whereas local debt can be monetized by the central bank, foreign debt has to be funded. Hence the "crisis". Last but not least, assuming u r russian or a russophile, Russian banks and corporates owe more than $ 400 billion in foreign debt. That's fairly comparable to the government's $ 500 billion reserves. The cynics would say it's rather silly for the gov to lend its reserves to foreign gov (reserves are invested in US bills) and force its own corporates to borrow foreign currency on commercial terms. PJ

southernThreads: 116 Posts: 10,957 Joined: May 17, 07	Edited by: southern Oct 30, 08, 07:14 / #
Moodi: In Hungary public debt is 60% GDP whereas in Poland it is 40%. Is this difference of 20% enough to explain why Hungary needed 20 billion $ bailout and Poland not? Moodi: The Baltic states, although having troubles as well, have very little public debt and public finances are solid. Yes,but Latvia is on the way to collapse.Something is happening there. Moodi: The Economist Did the Economist predict the crisis?How is it possible that anarchists through indymedia have writen the last year every day about the Krach while the official economic magazines do not have a word about that?How did the anarchists know what is going to happen?I mean are the economists so incapable or do they obey to orders not to reveal the true nature of processes?

ParisJazzThreads: 2 Posts: 196 Joined: Oct 23, 07	Oct 30, 08, 07:32 / #
southern: Moodi: In Hungary public debt is 60% GDP whereas in Poland it is 40%. Is this difference of 20% enough to explain why Hungary needed 20 billion $ bailout and Poland not? The problem is neither the level of debt nor that of deficit or inflation. The problem is that the credit markets have dried up and therefore FUNDING FOREIGN DEBT (EUR, USD, JPY, CHF..) became literally impossible as nobody is willing to lend. Hence the countries who've got huge foreign (public and corporates) debts, and little reserves, due to be funded shortly have severe problems. At the moment, they are all claiming to be in sound conditions. However, you would expect self serving politicians to say that, wouldn't you. Bur as W. Buffett once said ""You don't know who's swimming naked until the tide goes out". PJ

outintheyardThreads: 37 Posts: 542 Joined: Jan 7, 08	Oct 30, 08, 08:09 / #
It is all controled by aliens from out in space laughing at us!

ParisJazzThreads: 2 Posts: 196 Joined: Oct 23, 07	Oct 30, 08, 08:33 / #
southern: Yes,but why does USA which has the biggest debt not face such problems? The USA has US dollar denominated debt and therefore that's no foreign debt. That's local debt. Local debt can be monetized by the central bank. Thus, increasing the monetary mass and devaluating the currency. That's what most countries used to do before the German principle of stable prices won the day and sound public finance management became the de facto standard. But most importantly, the USA has the unique advantage of having the de facto international currency of the world. USA debt is as liquid as the dollar itself and is highly in demand. Most central banks keep their dollar reserves in form of american public debt, and thus cheaply financing american borrowing. southern: For example has anyone told Hungarians that their GDP increase and increase in living standards is due to heavy borrowing and not to real increase in productivity? Sadly, it's not the Hungarians who decide but their political leaders whose only interest is reaching power and keeping it. This is not a Hungarian problem. This is a modern problem in all countries. As a politician, you do not access power by promising health care privatisation, education privatisation, drastic defense expenditure reductions and halving pensions benefits. You'd have to keep the current level of spending AND promise more on top. PJ

MoodiThreads: 1 Posts: 7 Joined: Oct 9, 08	Edited by: Moodi Oct 30, 08, 07:07 / #
southern: Why economic crisis hit Hungary so hard but not Poland? I can provide some light on the question: In Hungary since 2006, 90% of new mortgages have been taken in hard currency because they offered much lower interest than the forint denominated. Forint being weak means higher interest payments. In Hungary public debt is 60% GDP whereas in Poland it is 40%. The strong Polish economy has provided the government with good tax revenues, thus kept budget deficits low. The Baltic states, although having troubles as well, have very little public debt and public finances are solid. The source for these blurbs has been The Economist, October 25th 2008, "Who's next?".

MoodiThreads: 1 Posts: 7 Joined: Oct 9, 08	Oct 30, 08, 07:29 / #
Dunno if the magazine predicted the crisis since haven't been reading it that much. I just happened to read the article discussing the matter.

southernThreads: 116 Posts: 10,957 Joined: May 17, 07	Oct 30, 08, 08:01 / #
ParisJazz: FUNDING FOREIGN DEBT (EUR, USD, JPY, CHF..) became literally impossible as nobody is willing to lend. Yes,but why does USA which has the biggest debt not face such problems?What are the deals behind these debts? For example has anyone told Hungarians that their GDP increase and increase in living standards is due to heavy borrowing and not to real increase in productivity? I mean who is going to make us rid of this mystification?

dcb	Edited by: dcb Nov 1, 08, 10:00 / #
http://www.dziennik.pl/opinie/article258526/Za_wasza_i_nasza_gospodark e.html Edward Lucas "The Economist" About situation in Hungary, Ukraine, Russia, crisise, Poland, energy . I like this guy he was supporting Poland durring Russian occupation (cold war) he has interesting views.

SeanusThreads: 22 Posts: 30,158 Joined: Dec 25, 07	Jan 24, 09, 11:41 / #
http://www.youtube.com/watch?v=nbK3RhCQoI8&feature=channel, this is an excellent expose on the issue. The first speaker is impressive.

McCoyThreads: 46 Posts: 1,756 Joined: Jul 3, 08	Apr 26, 09, 11:35 / #
Poland's economy Not like the neighbours Apr 23rd 2009 \| WARSAW From The Economist print edition Most east European economies look sickly, but not Poland—so far http://www.economist.com/world/europe/displaystory.cfm?story_id=135275 32 __________________________________________________ EDITORIAL: Polish economics By \| Thursday, April 23, 2009 In the midst of the global financial crisis, Poland's economy is forecast to grow by almost 1 percent. According to business economists and the Economist magazine, Poland likely will be the only European country with a growing gross domestic product in 2009. http://www.washingtontimes.com/news/2009/apr/23/polish-economics/ ___________________________________________________ Poles look to replicate the Celtic Tiger Friday, April 24, 2009 The rapid growth of the Irish economy has been closely studied in Poland, writes COLM KEENA , where the global recession is being kept at bay http://www.irishtimes.com/newspaper/finance/2009/0424/1224245290255.ht ml

Polonius3Threads: 1,005 Posts: 4,834 Joined: Apr 11, 08	Apr 26, 09, 14:17 / #
Apr 26, 09, 14:28 - Thread attached on merging: GLOBAL CRISIS LESS SEVERE IN POLAND? It seems the global crisis so far has been less painful in Poland than elsewhere? Is that because fewer Poles were living on credit beyond their means than Americans or what? Also it doesn't seem the recession (negative GDP) will even hit Poland compared with Germany and other EU countries. What are the reasons according to you?

dtaylorThreads: 15 Posts: 992 Joined: Sep 15, 07	Apr 26, 09, 14:20 / #
I dont think that is true at all. The crisis has hit the UK hard, but the Polish Z has fallen to the same level 4 years ago. Coupled with the fact that students in Krakow are even finding it hard to get a job in McDonald's.

Mr GrunwaldThreads: 34 Posts: 2,358 Joined: Dec 16, 08	Apr 27, 09, 00:29 / #
My dad told me there is msotly nothing wrong, except for the banks beeing scared of letting people have much loans and etc... He told me the economy is doing all fine Is some of it true? He lives in Poland so so far I only know that

WroclawThreads: 77 Posts: 7,404 Joined: Apr 1, 06 [Moderator]	Apr 27, 09, 00:33 / #
some companies might have seen a drop in orders. i don't know about big unemployment problems. i think people are just being careful at the moment.

dtaylorThreads: 15 Posts: 992 Joined: Sep 15, 07	Edited by: dtaylor Apr 27, 09, 00:59 / #
Its called panic, and it is an infectious thing. Once one company begins, the next falls. My business in Scotland has been doing well, only because i refuse to be drawn into this crap.

Shawn_H	Apr 27, 09, 01:23 / #
dtaylor: Its called panic Also known as a negative feedback loop. Company A fears the recession and lays off people in order to appease the shareholders. John Q Public, hears about the layoffs, steps down his disposable income spending (restaurants, cars, homes, electronic gadgets etc.). All those companys employed in those sectors see decreased consumption and cut back their production/services/staff etc. Rinse and repeat. Hard to break the cycle once it is started.

SalomonThreads: 6 Posts: 602 Joined: Apr 7, 09	Apr 30, 09, 02:01 / #
The Guardian:

freebirdThreads: 3 Posts: 638 Joined: Jun 8, 07	Apr 30, 09, 03:26 / #
southern: Will economic crisis hit Poland? It has happened in much bigger and stronger countries than Poland, obviously it will also attract Poland too.

southernThreads: 116 Posts: 10,957 Joined: May 17, 07	Edited by: southern Apr 30, 09, 10:30 / #
I think crisis hit polish workers abroad and in Poland.

GoDfaTheR420Threads: 7 Posts: 46 Joined: Jan 2, 09	Apr 30, 09, 11:03 / #
southern: I think crisis hit polish workers abroad and in Poland. But Foreign workers here in Poland can live like kings!....I have rented out my house in England....the rent i get pays for my mortgage...AND my rent here!...I also make a good living teaching English....which has been affected by the crisis...but in a positive way...thank god!