Macro Flash: The New President and record voter turnout

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• K.Nawrocki, supported by Law and Justice (PiS), won Poland’s presidential election against R.Trzaskowski (Civic Coalition). K.Nawrocki secured 50.89% of the vote, while R.Trzaskowski received 49.11%. The turnout reached a record high of 71.63% in presidential elections. The difference in the number of votes received by the two candidates was the smallest in history.
• While the President of Poland has limited power with prevailing role of the Parliament and the government, it has some important prerogatives, which may have implications for the economy and markets.
• Key presidential powers include the legislative veto, the appointment of the NBP Governor, and the nomination of 3 out of 9 members of the Monetary Policy Council. The President may dissolve the Parliament if the budget bill is not passed on time or three consecutive attempts to form a government fail. Generally, the President serves as the head of state and commander-in-chief, primarily representing the country in foreign affairs.
• Potential power struggle between the President and the government may delay structural reforms until next parliamentary elections in 2027, thereby increasing reliance on fiscal measures and postponing fiscal consolidation. This dynamic could pressure the NBP to maintain higher rates and adopt a tighter monetary policy stance.
• Political division could temporarily raise risk premiums in financial markets, potentially weakening the zloty and pushing bond yields higher. However, renewed tensions with the EU over fund disbursement and the Rule of Law appear unlikely, given the President’s limited legislative authority.