Warsaw. Aug 11, 2006. 14:50 GMT. CEEMARKETWATCH.
Poland’s current-account swung to surplus in June, with the balance a positive EUR 160mn against a revised shortfall of EUR
220mn in May and the deficit of EUR 197mn expected, according to preliminary data published by the NBP on Friday. A year earlier, the CA noted a
surplus of EUR 181mn. Both import and export growth rates slowed sharply, with exports slightly better off. This allowed the trade balance to post a
surplus, against a big deficit the previous month and a slight one a year earlier. The balances on current transfers gave a major boost, with the
deficit on income a drag, mostly due to big dividend payments. Overall, the 12-month deficit of EUR 13.7bn remains very benign at something like
1.3-1.5% of projected GDP, and is fully covered by FDI inflows.
Export growth slumped to 16.0% from a revised 31.4% in May and roughly even with the 15.4% growth posted a year earlier. The total export volume was
EUR 7.756bn, the highest nominal figure ever as May was revised down from EUR 7.808bn to EUR 7.720bn. Export growth of anything from manufactured
goods to food has been strong, as Polish companies remain competitive. Germany, which accounts for 27% of all exports, saw strong H1 export growth of
18.6% y/y, according to foreign-trade stats from the Central Statistical Office (CSO). Exports to other CEE countries are going quickly, in part as
major manufacturers connect together supply chains. The 4-month moving average slid to 20.6% y/y from 21.4% after May.
Import growth slowed from a revised 29.8% in May to 13.8% in June, and compared with 11.7% a year earlier. The import volume was well down to EUR
7.695bn in June from a revised EUR 8.217bn in May, the latter a record high. Foreign trade data has shown imports from low-cost developing markets and
CEE, including energy-rich Russia, shooting higher by some 30-40% in recent months, though EU countries still account for the lion’s share of imports
to Poland. The 4-month moving average slipped to 18.7% y/y from 20.3% after May.
The income deficit widened to EUR 863mn in June from a revised EUR 823mn in May and EUR 781mn in June 2005. Strong corporate profitability is feeding
big investment and dividend payments. The NBP noted that some EUR 640mn was accounted for by direct foreign engagement in Polish subsidiaries, with
EUR 740mn in dividends (EUR 566mn in May), a negative EUR 139mn as reinvested profits (EUR 16mn in May) and EUR 38mn as interest payments on credits
(EUR 40mn in May). In June, telecom giant TPSA and top bank Pekao paid some PLN 2.6bn in dividends alone, and others will pay as well. July will see
further payments, but August will see spikes, as copper giant KGHM will pay out PLN 2bn and state bank PKO BP will pay PLN 800mn.
The services surplus fell slightly to EUR 196mn from a revised EUR 230mn in May and EUR 268mn a year earlier. This came from the surplus on transport
services (EUR 200mn against EUR 180mn in May) and travel (EUR 199mn vs. EUR 150mn in May) while other services noted a deficit (EUR 123mn against EUR
105mn in May). The surplus on current transfers was EUR 766mn, down from EUR 870mn the previous month, though that figure was sharply revised higher
from that originally reported.
EU FLOWS
Poland recorded a EUR 276mn surplus in June in terms of government clearance with the EU as noted on the BoP, against a EUR 425mn surplus originally
reported for May. The country paid EUR 125mn in EU payments and membership fees booked on the BoP, against EUR 158mn in May. It received EUR 401mn
(EUR 583mn in May), with EUR 379mn in current transfers (EUR 440mn in May) and EUR 22mn in capital transfers (EUR 143mn in May). The current transfers
were mostly for refunds for direct payments to farmers and for direct agricultural market interventions.
CA STATISTICS (EUR MN)
- |
Jun-05 |
May-06 Original |
May-06 Revised |
Jun-06 |
12M to end-Jun |
| CA balance |
181 |
-209 |
-220 |
160 |
-3,484 |
Goods |
-80 |
-483 |
-497 |
61 |
-2,105 |
| - Exports |
6,684 |
7,808 |
7,720 |
7,756 |
83,813 |
| - Imports |
6,764 |
8,291 |
8,217 |
7,695 |
85,918 |
Services |
268 |
225 |
230 |
196 |
1,637 |
Income |
-781 |
-817 |
-823 |
-863 |
-8,503 |
Current transfers |
774 |
392 |
870 |
766 |
5,487 |
| Financial account: |
854 |
1,872 |
1,788 |
-213 |
10,539 |
| FDI inflows |
292 |
519 |
505 |
330 |
7,803 |
| Net E&O |
-312 |
-44 |
51 |
-674 |
-2,926 |
| Overall BoP |
745 |
1,759 |
1,759 |
-748 |
5,068 |
Source: NBP |
Aug
09, 2006.