Economic growth in Poland “remains robust, unemployment continues to decline, and deflation has dissipated,” Deputy Managing Director and Acting Chairman of the IMF’s Executive Board, Mitsuhiro Furusawa, said in a statement.
The statement came after the IMF on Friday approved a new two-year precautionary Flexible Credit Line (FCL) arrangement for Poland worth about EUR 8.24 billion to “provide valuable insurance against external shocks, supplementing Poland’s flexible exchange rate and strong reserve buffers.”
The Polish authorities “intend to treat the arrangement as precautionary and do not intend to draw on the FCL,” according to the statement.
Furusawa also said that Poland’s institutions and policy frameworks “rank favourably among peers,” and the country’s authorities are “committed to maintaining strong policies and institutions to support inclusive growth, which remains their key priority.”
“In particular, the authorities intend to maintain sustainable public finances by keeping the fiscal deficit below the Excessive Deficit Procedure limit of 3 percent of GDP in 2017 and by starting fiscal consolidation in 2018,” Furusawa said.
He also noted that Poland’s current account “is close to balance” and its international reserves have increased. “Moreover, the banking system remains liquid and well capitalized,” Furusawa said.
The statement allows that, “notwithstanding the strengths of the Polish economy, external risks remain elevated” amid uncertainties including a possible growth slowdown in the euro area, financial market volatility, the upcoming Brexit negotiations, and a heavy election calendar in Europe in the next 12 months.
The IMF’s Flexible Credit Line is available to countries with “very strong fundamentals, policies, and track records of policy implementation and is particularly useful for crisis prevention purposes,” the statement says.
Poland has been a member of the IMF since 1986. Its first FCL arrangement was approved in 2009, followed by successor arrangements in 2010, 2011, 2013 and 2015, the IMF said. (str/pk)
Source: money.pl, imf.org