In June, the current account deficit widened to €2216m (ING: €1339m; consensus: €679m), from €1071m in May and a deficit of €445m in June of last year. We estimate that the 12‑month rolling current account deficit increased to 1.0% of GDP, up from 0.8% of GDP in the previous month. The main source of the surprise is the record-high primary income deficit of €4444m, which is significantly above last month’s outcome (€3160m) and the previous record from June last year (€3998m), and which largely reflects seasonal dividend payments and the reinvestment of earnings by foreign-owned enterprises.
The trade balance deficit amounted to €1469m, slightly higher than in May (€1182m), amid exceptionally strong trade flows. Export values in EUR increased by 12.3% year-on-year (consensus: 8.0%), while imports rose by 16.9% (consensus: 9.4%). Such strong growth reflected higher transaction prices, the recovery in global trade, and calendar effects. For imports, an additional factor may have been the acceleration of investment projects related to the implementation of the Recovery and Resilience Facility. National Bank of Poland (NBP) comments indicate that high foreign trade dynamics are driven primarily by capital and intermediate goods. It is also worth noting that, according to the NBP, the increase in global energy commodity prices is a significant contributor to the widening of the trade deficit.
The positive aspect of today’s release is the second record related to the balance on services. The surplus reached €3900m, compared with €3379m in May and the previous record of €3872m set in June 2022. Finally, the secondary income balance recorded a relatively small deficit of €203m, compared with €108m in May.
In our view, the June current account deficit should be seen more as a one-off event than as the beginning of a persistent trend. Poland remains in a position of external balance, despite the deterioration in the terms of trade, which is related to rising commodity prices, and the appreciation of the real effective exchange rate of the zloty over recent years. Balance of payments’ developments do not constitute a significant source of depreciation pressure on the Polish zloty. The PLN is currently driven primarily by global risk sentiment and the outlook for NBP monetary policy relative to that of other central banks.