Poland Macro Weekly: Getting closer to the EU funds

TOP MACRO THEME(S):

How do we see 2024 after January data? (p.2) – in mixed data for January we find signals that support our belief in a robust GDP growth this year.

WHAT ELSE CAUGHT OUR EYE:

The President of the EC, U. von der Leyen, informed that the EC is impressed by Poland’s efforts to restore the Rule of Law as the backbone of its society. Next week the EC is about to announce decisions on freeing funds up to EUR 137 billion for Poland (from RRF and Cohesion Fund).
Finance Minister, A.Domanski, said he did not plan to amend the budget act. In terms of the VAT revenues, further actions are planned to tighten the tax system, but a lot will depend on the economic situation. In this regard, the government maintains its forecast of GDP growth above 3% in 2024.
Minister of Climate and Environment, P.Hennig-Kloska, said that the unfreezing of energy prices should be gradual, the smoothest exit from the freeze would be an increase in the bill for households in 2h24 by 15%. The draft law on energy prices is to be presented within two weeks. Adopting such a solution (we assume that it would apply from July) would increase inflation in 2h24 by approx. 1.2pp compared to our current forecast.
The chairman of the Public Finance Committee, J.Cichon, said that by the end of March Civic Coalition plans to submit to the Sejm (lower chamber of Parliament) a preliminary motion to hold the Governor of the NBP, A.Glapinski, accountable before the State Tribunal.
M3 money growth decelerated to 7.7% y/y in January (from 8.5% y/y in Dec.). Mortgage loans increased by 1.1% m/m, at the fastest pace since Oct-21, when the monetary tightening cycle begun.

THE WEEK AHEAD:

We will be looking for a confirmation of a weak consumption in final 4q23 GDP reading (PKOe: -0.1% y/y), as the preliminary estimate disappointed with GDP growth at 1.0% y/y and stagnation in q/q terms. Manufacturing PMI should rebound in February, but high concentration of the sample on exporters poses a downside risk.

NUMBER OF THE WEEK: