Poland, Economic Prospects – February 15, 2013


Last year I had submitted a report on bright economic prospects in Poland. Recent analysis tends to confirm this continuing upward trend. While most of the European Union (EU) countries were affected by the global crisis of 2008, Poland was an exception in that it avoided a recession. According to a recent Financial Times article Poland also enjoys the distinction of being the fastest growing member of the EU since 2008. The robust Polish economy is expected to grow another 2.4 per cent in 2012. The budget deficit has been cut from 7.9 per cent to an estimated 3.5 per cent in 2012. The nation also features favorable debt conditions. Public debt at the end of 2010 reached 53 per cent of GDP. This compares favorably with 77 percent for Germany, 62 per cent in the UK and nearly 94 per cent for the United States. For investors looking to add exposure to Polish companies, there are only a few that trade on US exchanges, but opportunities do exist in the exchange traded fund sector. The Market Vectors Poland ETF (Nasdaq PLND) and the i shares MSCI Poland Index (Nasdaq EPOL) both provide access to Poland. According to Investopedia, long term investors are advised to go with the i shares fund. Another Financial Times article suggests that a promising long term investment in Poland is offered in the coal gasification field. This is an area where East European countries are focusing more to exploit domestic coal resources and convert them to gas, rather than be hostage to importing gas from Russia. In the past few occasions, Russia has not been averse to turning the tap off to force compliance with its political or economic demands foisted on Eastern and Western European countries. While much of Europe is still mired in crisis Poland stands out as a prospect for portfolios. Investopedia has stated that “Its [Poland] strong current growth prospects and good outlook makes the nation an ideal candidate for a portfolio weighting. Longer term investors may want to add the nation either through one of its single exchange traded funds or through the Guggenheim Frontier Markets ETF (NYSE:FRN)”. The Caret Group may wish if it considers it feasible, to examine these investment opportunities in Poland.


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