![]() ![]() Risk on/risk off mode does not seem to change this paradigm. PMI is below 50 and the German economy is also showing signs of weakness, especially in the automotive sector, where Poland is the main outsourcing base. Our economy is growing thanks to the contribution of private consumption, but investment levels are stubbornly low. ![]() ![]() Either the market does not believe in the long-term sustainability of this growth, or the future is too blurred in front of a potential global slow down. Even though the economy is thriving, the market is pricing our currency in the upper band, around 4.25 - 4.30 in recent months. For many years now, the Polish zloty has been quoted in a narrow corridor of 4.00-4.30 to the Euro. The Polish economy has been growing rapidly in recent quarters (at around 5% of GDP). In broader perspective this is very interesting. We act as the typical exporter, which means we are monitoring the market and using derivatives to hedge ourselves at historically attractive levels. As Poland's biggest coal exporter, how does JSW plan for currency movements such as this?Īs a commodity producer, our exposure is mainly on the USD/PLN side. The zloty strengthened to a 14-month high against the euro in July. In many larger Polish cities, real estate has performed well, plus folks tend to prefer living in detached houses, so they move to rural areas with access to the big cities. Warsaw, as far as I know, is one of the few capital cities of ex-Eastern Block with a rising population. Even in 2008/09 the best places in London were fully booked. You wouldn’t judge the state of the US economy on the basis of packed NY restaurants and its clubs. What impact have the government's bold fiscal measures had on Polish consumers outside of the major cities? But rural areas represent 93% of Poland’s total landmass and the rural population share has been rising since the early 2000s. On a recent visit to Warsaw we noticed that the shops were full and people were spending freely. The Polish government fiscal stimulus has not gone unnoticed by international investors. ![]()
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