18 January 2013

IMF Executive Board approves new two-year US$33.8 billion flexible credit line arrangement for Poland

Following the Executive Board discussion of Poland, Mr David Lipton, First Deputy Managing Director and Acting Chairman of the Board, made the following statement: “Poland has very strong economic fundamentals and policy frameworks. A credible inflation targeting regime has helped contain inflation, while the flexible exchange rate has played a key stabilising role, and the sound financial supervisory framework has contributed to a well-capitalised, liquid, and profitable banking system. The authorities’ skillful macro-economic management underpinned Poland’s solid recovery in 2010-11, allowing a gradual restoration of policy buffers despite the challenging external environment. These efforts included substantial fiscal consolidation, steady reserve accumulation, measures to mitigate risks related to foreign currency lending, and reforms to boost long-term growth potential.

“However, the economy is feeling the effects of headwinds from the rest of Europe, and growth has slowed since early 2012. Economic activity is projected to moderate further in 2013, with risks stemming from Poland’s substantial trade and financial linkages in the region. The authorities are committed to continue to implement sound economic and financial policies that support economic growth and improve the resilience of the banking system. Nevertheless, heightened risks to the balance of payments remain a key concern for Poland, and the challenging growth environment may also make the country more vulnerable to external shocks. Against this background, a successor two-year FCL arrangement, which the authorities intend to continue to treat as precautionary, will bolster Poland’s buffers against heightened external risks, help sustain market confidence, and continue to support the authorities’ overall macro-economic strategy.”

Full press release

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