POLAND: Zloty under pressure, but Poland's credit rating remains solid

2 February 2012 — Daniela GHETU
Although Poland is one of the fastest growing economies in Europe, the Warsaw Stock Exchange and the zloty have felt tremors after almost every shock in the global or European economy. The main reason is that Poland is seen as an emerging market and lumped in together with other, less healthy economies in the region, writes The Warsaw Voice.

?ukasz Bugaj, an analyst at the BO? brokerage, says the zloty has been recently harmed not only by eurozone problems but also by the decisions of top rating agencies to downgrade Hungary's credit rating to junk status. As a result, in early January, the zloty slid steadily against the euro, breaking the zl.4.50 barrier on several occasions.

It was only after Poland received a positive grade from the European Commission that the zloty stopped depreciating. The European Commission—in letter from Olli Rehn, the EU commissioner for economic and monetary affairs—said Poland had taken the right steps to reduce the government deficit this year. Although Poland's budget deficit will overshoot the maximum allowable level of 3 percent of GDP this year, reaching 3.3 percent, it would not cross this mark if the costs of the pension reform were deducted.

Read the full article on here.

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