Bloomberg News

Polish Current-Account Shortfall Widens Less Than Forecast

June 29, 2011

(Updates with economist’s comment in fourth paragraph, zloty in fifth, central bank comments in seventh.)

June 29 (Bloomberg) -- Poland’s first-quarter current- account deficit was less than the median estimate of economist as the central bank’s change in methodology added less to the shortfall than estimated.

The gap was 3.36 billion euros ($4.82 billion) in the first quarter, compared with a revised 2.17 billion euros a year earlier, the Warsaw-based Narodowy Bank Polski said today. The median estimate of 17 economists surveyed by Bloomberg was 4.15 billion euros. The bank, which changed its accounting rules to reduce the volume of unclassified transactions, also revised current-account figures since 2004.

Poland’s current account, the broadest measure of money flowing in and out of the country, attracted investor attention after the deficit in unclassified items, or errors and omissions, exceeded the overall shortfall for a second year in 2010. The changed methodology cut errors and omissions by shifting used-car imports to the trade balance and classifying current transfers more precisely, the bank said.

“The revised data didn’t confirm the concerns of some investors,” Grzegorz Maliszewski, chief economist at Bank Millennium SA in Warsaw, said by phone. “The deficit structure doesn’t pose a big risk to Poland’s financial stability because it’s financed by long-term capital inflows, such as EU funds.”

Zloty Gains

The zloty traded at 3.9957 per euro at 4:30 p.m. in Warsaw, from 4.006 before the data release and 4.01 late yesterday, its weakest since April 4. The cost of protecting Polish debt against non-payment for five years using credit-default swaps fell to 157.4 from 165.4 yesterday, after rising to a seven- month high of 166 on June 24.

The revised figures widened last year’s current-account deficit to 4.5 percent of gross domestic product from a preliminary figure of 3.4 percent of GDP, the central bank said in a statement. That was below economists’ predictions that the ratio may exceed 5 percent.

"Poland’s current account deficit gives no reason for any concern whatsoever, considering the fundamentals of our economy," Jozef Sobota, the head of the central bank’s statistics department, told reporters in Warsaw. He said errors and omissions, which were nearly halved for 2009 to 2.3 percent of GDP from 4.4 percent, are now in line with those of other countries with economies of a comparable size to Poland’s.

The statistical changes were prepared with help from the International Monetary Fund, which sent a technical mission to Poland this month. The revised payments data published today “are based on appropriate compilation techniques,” the IMF said in an e-mailed statement.

--With assistance from Barbara Sladkowska and Monika Rozlal in Warsaw. Editors: Balazs Penz, Andrea Dudikova

To contact the reporter on this story: Dorota Bartyzel in Warsaw at

To contact the editor responsible for this story: Balazs Penz at

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