Polish market is still on a roll

Poland’s GDP is expanding rapidly, consumption is growing at the fastest pace in eight years, unemployment is at a record-low and new child-benefit payments are boosting confidence.

If you've been holding Polish stocks this year, "you can afford to buy a round of Zywiec beers", says Victor Reklaitis in Barron's. Poland elected a nationalist government with authoritarian tendencies in late 2015, and there have been several rows with the EU since then. Brussels has even threatened to strip Warsaw of EU voting rights if the Law and Justice Party forces judges out of office. Yet this difficult backdrop has so far done nothing to hamper the economy.

GDP expanded by 3.9% year-on-year in the second quarter, after a 4% rise in the first. Consumption grew at the fastest pace in eight years in the first quarter, with record-low unemployment and new child-benefit payments boosting confidence.

The stronger eurozone bodes well, while on the fiscal front Poland has "had a spectacular year", notes Bank of America Merrill Lynch. Closing VAT loopholes has paid dividends, helping lower the deficit. This is likely to hit 2.5% of GDP this year. Inflation is stable, suggesting no need for interest rates to rise just yet. Stocks remain good value and look set to head back to their 2015 highs.

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Andrew Van Sickle

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.