The National Bank of Poland reported a current account surplus in April 2021 of 1,740 million euros against a consensus of 1,260.5 million euros in surplus. Exports rose 69.2% in April. On an annual basis versus consensus growth of 62.8%. On an annual basis, imports increased by 59.8 percent. On an annual basis compared to the expected growth of 58.7 percent. The Polish National Bank said that in April the value of exports increased, especially car batteries, televisions, catalytic converters, clothing and furniture. On the other hand, the most important impact on imports has been the increase in the value of imports of cast iron, rolled steel products, clothing, parts for televisions, computers and processors.
The current account balance in April was positive and amounted to PLN 8.0 billion. In the corresponding month of 2020, the current account balance stood at PLN 3.3 billion, according to preliminary Polish balance of payments data for April, released by the Polish National Bank on Monday.
As reported by NBP, merchandise exports amounted to PLN 106.8 billion and were PLN 44.0 billion (70.0%) higher than in the corresponding month of 2020. This is the result of the level of lower benchmark from April 2020, when the value of trade declined significantly due to restrictions in place at that time aimed at stopping the spread of the COVID-19 epidemic.
Imports of goods increased by PLN 38.0 billion (ie 60.5%) and amounted to PLN 100.9 billion. The merchandise trade balance was positive and amounted to PLN 5.9 billion.
NBP data shows that revenues from export of services amounted to PLN 22.0 billion, and compared to April 2020, it increased by PLN 3.8 billion (i.e. say 20.9%). Expenditure amounted to PLN 12.4 billion and increased by PLN 1.7 billion (or 15.8%) compared to April 2020.
“The primary income balance was negative and amounted to 7.4 billion zlotys. The negative balance was determined mainly by the income of foreign direct investors due to the participation of their capital in Polish entities, which amounted to 7.9 billion zlotys. The income balance was also affected by income payments. Portfolio investments (0.7 billion PLN) and other investments (0.4 billion PLN), ”it was written on the NBP program.
They expected the current account balance to increase to 2,560 million euros from 938 million euros in March, which resulted from an increase in the trade balance in goods.
We expect export dynamics to drop from 27.7% yoy in March to 69.4% in April, and import dynamics to drop from 24.6% yoy to 55.2%.
Strong export and import growth will be consistent with the year-over-year acceleration in industrial production and retail sales in April, supported by this year’s weak base effects associated with the outbreak of COVID-19. In our opinion, the balance of payments data will be neutral vis-à-vis the zloty exchange rate and Polish bond yields.
The start of 2021 saw the value of Polish food exports drop. According to GUS data, its value over the January-March period decreased 0.6% year-on-year. One factor that limited Polish food exports in the first quarter was lower sales to the UK due to Brexit (including the impact of UK food stocks at the end of last year amid uncertainty pre-Brexit). and increased transaction costs). ).
It should also be noted that Polish exports declined in the first quarter of this year. The negative calendar effect linked to the leap year also had an effect (in 2020, February had 29 days, while in 2021 it had 28). A detailed analysis of the data after months shows that March of this year. There is already a slight increase in Polish exports of agro-food products over one year (+ 2.8% over one year).
In the coming months, we anticipate a further rise in the value of Polish food exports, supported by the gradual recovery of the HoReCa sector that we anticipate, in addition to the sharp rise currently observed in the prices of agricultural raw materials.
As a result, we estimate that the value of Polish agri-food exports in 2021 will increase by around 8% and exceed 37 billion euros, setting a new record. The main risk factors for our forecasts are the continuation of the epidemic, as well as the agro-meteorological conditions in Poland.
According to economists’ forecasts, the current account balance data for April is among those most affected by the impact of the low base. Experts predict that exports in April increased by more than 60%. Import growth also approached this level, albeit slightly lower. This high momentum is the impact of the coronavirus pandemic – in response to the first wave of infections that emerged a year ago, individual governments have imposed restrictions limiting economic activity, which, among other things, has led to the collapse of international trade.
Whatever the dynamics of the components defining the scale, Poland regularly records surpluses. Everything indicates that April saw a continuation of this trend. We expect a surplus of around 1.3 billion euros, after a surplus of 940 million euros in March. The last time Poland posted a current account deficit was in August 2019.
PKO BP economists point out that after the release of April data, the last 12-month balance will once again hit the highest value in history.
Santander BP economists note in their weekly bulletin that current account data they believe could be better than expected and could impact the zloty.
The economists wrote: “Foreign trade data will look very positive – high current account surplus (our forecast is clearly above consensus), export dynamics above 60% year-on-year (base effect!) – which could temporarily support the zloty. They noted that the appreciation of the zloty was catching up with other currencies in the region, which rose in value last week.