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IMF Country Report No. 12/162


July 2012

Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of the 2012 Article IV consultation with Poland, the following documents have been released and are included in this package:

  • Staff Report for the 2012 Article IV consultation, prepared by a staff team of the IMF, following discussions that ended on May 16, 2012, with the officials of Poland on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on June 15, 2012. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.

  • Informational Annex prepared by the IMF.

  • Staff Statement of July 2, 2012.

  • Public Information Notice (PIN) summarizing the views of the Executive Board as expressed during its July 2, 2012 discussion of the staff report that concluded the Article IV consultation.

  • Statement by the Executive Director for Poland.

The document listed below has been or will be separately released.

Selected Issues Paper

The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.

Copies of this report are available to the public from

International Monetary Fund • Publication Services

700 19th Street, N.W. • Washington, D.C. 20431

Telephone: (202) 623–7430 • Telefax: (202) 623–7201

E-mail: Internet:

International Monetary Fund

Washington, D.C.

© 2012 International Monetary Fund

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Context. Poland’s economy performed well throughout the crisis, reflecting very strong fundamentals and decisive counter-cyclical policies. After robust growth last year, the economy is expected to slow in 2012 as heightened uncertainty and tighter credit conditions weigh on private consumption and investment. Fiscal space to respond to new adverse shocks is now more limited than in the past, suggesting that the policy mix would need to rely more heavily on monetary policy.

Interconnectedness. Trade and financial linkages with Europe are significant, including cross-border vertical integration of non-financial corporations and foreign ownership of the banking system.

Fiscal policy. The fiscal deficit is set to decline to 3.1 percent of GDP in 2012, from 5.1 percent of GDP in 2011. Over the medium term, additional measures of ¾-1 percent of GDP will be needed to achieve the authorities’ medium-term fiscal objective. In the event of an adverse shock, automatic stabilizers should be allowed to operate.

Monetary policy. Policy interest rates should remain on hold on account of the slowing economy and projected decline in inflation. If the economy were to slow significantly, and the outlook for inflation were to weaken, policy rates should be cut given the ample scope to do so. The NBP is prepared to provide liquidity support in both zloty and foreign currency, if needed.

Financial sector policy. Recent supervisory measures are helping to further improve the resilience of the banking system. Increased capital and liquidity buffers, as well as stricter prudential standards, are helping to address risks associated with foreign-currency denominated mortgages, but a more proactive approach to addressing non-performing loans is desirable. Work to strengthen the supervisory framework, improve prospects for long-term bank funding, establish a macro-prudential framework, and design a specific bank resolution regime is underway.

Structural reforms. Continued reforms—notably on improving the functioning of the labor market, easing administrative burdens, and advancing privatization—would boost potential growth.

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Approved By

Mahmood Pradhan and Vivek Arora

Ms. Kozack (Head), Ms. Lu, Ms. Ho, and Mr. Vazquez (all EUR), Ms. Nedelescu (MCM), and Mr. de Imus (SPR) visited Warsaw between May 8–16, 2012. The mission met with senior government and central bank officials, and representatives from trade unions and the business community. Mr. Allen (Resident Representative) and Mr. Sierhej (Resident Representative Office) participated in the discussions. Poland is an Article VIII country and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions, except for those solely for the preservation of national or international security. (Informational Annex: Fund relations). Data provision is adequate for surveillance (Informational Annex: Statistical Issues).




    • A. The Economic Expansion is Slowing

    • B. The Banking System Has Been Resilient



    • A. Monetary and Exchange Rate Policies

    • B. Entrenching Fiscal Consolidation

    • C. Safeguarding Financial Stability

    • D. Deepening Structural Reforms and Euro Adoption



  • 1. Selected Economic Indicators, 2010–17

  • 2. Balance of Payments on Transaction Basis, 2009–17

  • 3. Statement of Operations of General Government, 2008–17

  • 4. Monetary Accounts, 2006–12

  • 5. Financial Soundness Indicators, 2006–12

  • 6. Public Sector Debt Sustainability Framework, 2007–17

  • 7. External Debt Sustainability Framework, 2007–17


  • 1. Recent Developments in Economic Activity, 2007–12

  • 2. Labor Market, Capacity Utilization, and Inflation, 2008–12

  • 3. Balance of Payments Developments, 2007–11

  • 4. Monetary and Financial Developments, 2009–12

  • 5. Banking Sector Developments, 2007–12

  • 6. Residential Real Estate Lending, 2006–12

  • 7. Public Debt Sustainability: Bound Tests

  • 8. External Debt Sustainability: Bound Tests


  • 1. Cross-Border Linkages of the Polish Banking System

  • 2. External Sector Assessment

  • 3. Economic and Financial Linkages With the Euro Area

  • 4. Implementation of Past Fund Advice

  • 5. What Drives the POLONIA Spread?


  • I. Corporate Bond Market Development and Local Currency Funding

  • II. Privatization of State-Owned Enterprises

  • III. Credit Growth and Non-Performing Loans—Recent Developments and Outlook

  • IV. Poland’s Export Structure

  • V. Risk Assessment Matrix

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June 15, 2012

Prepared By

European Department




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Public Information Notice (PIN) No. 12/70


July 5, 2012

International Monetary Fund

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Washington, D. C. 20431 USA

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Fax 202-623-6772