More and more Polish companies go bust

290 cases of bankruptcy were reported in the first half of 2009 (as compared with 195 cases in H1 2008), according to data collected by Euler Hermes, international trade credit insurer.

The number of companies filing for bankruptcy has increased by almost a half (49%) while this number was just above 10% after Q1 2009.

According to Euler Hermes analysts who compiled the report, the growing trend in the number of insolvencies in Poland will continue. ‘We do not expect a decrease in the number of bankruptcies – exports and internal investment demand are lower; the direction in which consumer demand will move is unpredictable. The weak zloty is not a sufficient incentive to stimulate export: it encourages competitiveness but is unable to generate additional demand for Polish products’ according to Tomasz Starus, chief analyst and head of the Risk Assessment Team at Euler Hermes.

Polish Market

ECONOMIC MONITOR

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• ● In December 2009 and January 2010, as in previous months in the second half of 2009, the Polish economy stood out against other countries in terms of GDP growth. Poland’s economic growth was higher than projected and higher than in other European countries.
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• In 2009 construction output increased by 3.7%.
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• Retail sales increase in most product groups.
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• On the Warsaw Stock Exchange, stock prices were very volatile in January 2010.
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• At the end of December 2009 the registered unemployment rate (claimant count rate) amounted to 11.9% versus 11.4% in November.
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• At the end of January the president signed the 2010 budget bill into law. The bill was adopted by the parliament on December 18.
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• In the fourth quarter of 2009 the Polish economy turned out to be more resistant to the global crisis than had been projected and than the economies of Polish neighbours, something which boosts optimism in forecasts for 2010 and the next years.
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WEEKLY MARKET ANALYSIS

The last portion of macroeconomic data for January will be released on Friday when the National Bank of Poland (NBP) is expected to publish balance of payments figures. We estimate that the current account deficit reached EUR580 million while the consensus of the “Parkiet” daily is EUR614 million. We expect that growth in exports slowed slightly in January to 10.9% y/y. We also predict that imports had already made up for last year’s losses and rose by 7.7% y/y in January.

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