Reforms must be implemented despite elections
Overview:
The Polish economy has proved largely resilient to the global economic downturn and continues to grow at a steady pace. The central bank is hiking interest rates to deal with rising inflation and the current account deficit is reasonably contained. The government is rightly committed to tightening fiscal policy and accelerating the privatization process both to avoid Poland’s debt to GDP ratio rising above the crucial 55% of GDP limit and to improve economic growth in the medium-term. There are some indications that actions on both fronts have not been quite as decisive as hoped leaving the government resorting to rather unorthodox measures to avoid the debt limit being breached. Reform momentum must be maintained as parliamentary elections approach, especially as the PO has a good lead in the polls.