Poland under pressure from financial markets, says PM – The First News
Poland’s record bond yields are the result of pressure from financial markets, said Mateusz Morawiecki, Poland’s prime minister.
Poland’s bond yields crossed the 9% mark on Friday, a level not seen more than 20 years ago, prompting state-owned development bank BGK to scrap a planned bond auction as it falters. expected to sell its bonds at lower rates.
Poland’s prime minister said in the northern city of Gdańsk on Saturday that a number of countries had come under increased pressure from financial markets due to a cycle of rate hikes by the US Federal Reserve and Central Bank. European.
Additionally, Morawiecki said, emerging economies and those aspiring to be included in developed markets, such as Poland, have seen their currencies weaken.
According to Morawiecki, Poland’s large current account deficit, seen by financial markets as a risk factor, is the result of high energy prices, but he expressed hope that the recent steps taken during an EU summit would help Poland reduce its current account deficit by implementing a new gas price calculation mechanism.
The opposition has accused the government of acting against the Polish central bank’s efforts to tackle inflation, which hit 17.2% in September. Critics say that while the central bank is raising interest rates, the government is flooding the market with a wide range of social programs and subsidies which, in turn, are driving up inflation.
“In domestic fiscal policy, we will strive to tighten it in the near future,” Morawiecki promised. “We are not planning any other expenses beyond those already budgeted.”
Poland’s bond yields were the fifth highest in Europe as of Friday, at 8.76%, behind Hungary, Turkey, Russia and Romania, according to tradingeconomics.com. The Czech Republic, in sixth place, is paying bond yields at 6.37%.