Higher employment, relatively high wage growth and negative inflation support high growth rates of private consumption in Poland during 2016 and going into 2017. Growth remains on track to reach around 3.5% in both 2015 and 2016 and growth momentum is likely to remain rather stable during 2016.
That said, political risks are now materializing and here to stay, with adverse impact likely in the financial markets. Standard and Poor's (S&P) has also downgraded Poland's foreign currency rating one notch to BBB+ from A- and even kept a negative outlook, while citing political and institutional risks.
"The PLN has weakened quite substantially in the first weeks of 2016. We believe the PLN will continue trading with a significantly political risk premium, at least until the details of the CHF-loan conversion law are public, but most likely through the year." said Nordea Bank in its report.