Poland’s current account moved further into surplus territory in January, rebounding sharply in spite of a sharp slowdown in exports. Current account reached EUR 717 million in January 2016 as compared with January 2015’s EUR 468mn. Export growth slowed sharply to 1.5% y/y in January, as compared with a 12 month moving average of 7.8%. Meanwhile, imports declined -0.3% y/y, which made it possible for the trade balance to improve despite slowdown in exports.
In emerging markets, current account has improved in the past year, and particularly in the case of CEE regions, it implies the decline in energy import prices. However, in Poland, there has been a longer-term ‘demand re-balancing’ story going on since 2013, with the current-account balance moving from a deficit greater than 3% of GDP until 2012 to a surplus now. The data for January confirms that this trend continues to be intact, which is supportive of zloty. EUR-PLN is expected to rebound to 4.25 in the following quarters.
