Polish Current Account deficit for January came out above estimates, amounting to USD 826 m, compared to the expected USD 590 m. Exports developed as expected, falling by 3.4% y/y or 7.6% m/m. The deceleration of exports is in line with the weaker demand in the EU. However, we can draw some warning from the situation of imports, which fell by 12.4% from the same month of the last year, despite being a shade higher than in December 01. Although we must take into account that imports were exceptionally strong in January last year, still it seems that the dramatic rate cuts along with the somehow improving business climate and consumer confi-dence in recent months were not confirmed by actual actions of investors or consumers.
On the financial account, the foreign direct investments were quite low. The inflow of USD 235 m was the lowest since the August 2000. The average of the last twelve months was USD 560 m. The high portfolio investments into the fixed income instruments (+USD 321m) reflect the speculations on rate cuts in January.
The worse than expected current account deficit sent the zloty lower from USD/PLN 4.22 to USD/PLN 4.2350, while the EUR/PLN depreciated from 3.6450 to 3.6630.
Konrad Soszynski, Kredyt Bank S.A., Warsaw
Jakub Dvorak, CSOB