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A new chapter

By GlobalCapital
30 Sep 2016

It is only a year since our last report in GlobalCapital was published, but so much has changed. Our country has opened a completely new chapter. Different ideas, opportunities, and challenges. Different standards that are set higher, targets that are more ambitious. And the world itself has changed substantially. Paradoxically, the world we are chasing appears to be rather fragile.

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Mr Piotr Nowak, Undersecretary of State

The challenging external environment is a reality we are facing right now. Our economy has proven several times to be quite immune to external shocks, but new ones are coming. Flexibility and the ability to adjust to changing market conditions have always been inherent features of our economy. Notwithstanding this fact, every effort must be made to develop further and ensure more broad-based growth. We cannot concentrate only on figures on paper. We must have in mind a real standard of living. Only a thorough reorientation of our economic policy can ensure it. 

We are constantly catching up with more advanced economies. This convergence is ongoing, but it may be faster. The ambitious reform agenda introduced by our government will secure robust growth in the following years while allowing the whole of society to benefit. Widely expected strong GDP figures, together with very positive labour market developments, in the years to come, reassure us that we are on the right path.

This year we have put a lot of effort into improving tax compliance and reforming the tax system. New legislation has been prepared and part of it has been already been launched. This extensive work has yielded its first positive results. Every month budget revenue figures beat our most optimistic expectations. However, our estimates for next year are reasonable and conservative. Nevertheless, the expected increase in tax revenues will create a solid and stable platform for government policies. 

This year, we have started several important measures. They may seem costly at first sight, but will be very beneficial in the longer run. They address long term challenges that had previously been downplayed. At the same time we are totally committed to keeping the general government deficit below 3% of GDP. The Draft Budget Act for 2017 satisfies this objective while accommodating major items of the government’s inclusive growth agenda. 

We are aware that our hard work will ultimately be evaluated by investors. And they seem to appreciate our efforts. The high level of demand and well-diversified structures of our international deals are indicative of investors’ confidence. The participation of official institutions like central banks and sovereign wealth funds on our domestic market manifest the trust in Poland as a good credit. We are proud of their involvement. They represent over a quarter of the value of foreign-held domestic securities. Our recent landmark transaction — the first European sovereign Panda bond — showed that no market is closed for us. We not only gained access to the third biggest debt market and significantly diversified our investor base, but also achieved a pricing well inside our secondary curve after swapping into euros. 

As the title says we have opened a new chapter. We want to take our country to the next level. We can grow faster and develop stronger in a sustainable way. And we are going to deliver that. 

By GlobalCapital
30 Sep 2016