Balance of Payments in Poland for Q4 2017

Balance of Payments in Poland for Q4 2017 Warsaw, 30 March 2018 The quarterly bop has been prepared based on monthly and quarterly information reported by Polish residents involved in transactions with non-residents, public statistics surveys as well as administrative data sources. This version of bop is preliminary and may be subject to further revisions. The current and capital account The balance on the current and capital account was positive and amounted to PLN 14.3 billion. In Q4 2017, the current and capital account balance equalled 2.5% of the GDP. Graph 1. Current and capital account, PLN billion The positive balance of the current account amounted to PLN 0.1 billion and improved by PLN 1.1 billion when compared with the corresponding quarter of 2016. This balance was influenced by: positive balances of services (PLN 21.1 billion) and secondary income (PLN 1.1 billion) as well as negative balance of primary income (PLN 19.3 billion) and trade in goods (PLN 2.8 billion) The ratio of the current account balance to GDP was positive and stood at 0.02%. 1 / 7

Compared to the corresponding period of 2016, the current account balance changed from negative to positive. The surplus in the current account was mainly due to improvement in the balance of services (by PLN 4.8 billion) as well as balance of secondary income (by PLN 3.6 billion). The increase in the negative balance of primary income (by PLN 2.4 billion) and the decrease in the balance of trade in goods (by PLN 4.9 billion) negatively influenced the current account balance. The capital account balance was positive and amounted to PLN 14.2 billion, an improvement when compared with the corresponding period of the previous year, was resulted from increased inflow of EU structural funds. In Q4 2017 inflow from UE funds amounted to PLN 14.6 billion and was higher by PLN 4.5 billion when compared with Q4 2016. Trade in goods In Q4 2017, exports were estimated at PLN 218.7 billion, and imports at PLN 221.5 billion. The growth in exports of goods (up by PLN 15.9 billion, i.e. 7.9%) resulted from increased sale of medicines, food as well as automotive industry products abroad. The increase in imports (up by PLN 20.8 billion, i.e. 10.4%) was largely due to the increase in imports of fuels and raw materials, passenger cars and one of transactions related to the purchase of aircrafts. Increase was also reported imports of machinery and equipment for industry. Trade in goods deficit in Q4 2017 stood at PLN 2.8 billion. In the corresponding quarter of 2016, it was positive and amounted PLN 2.1 billion. International trade in services Exports on services provided by Polish entities to foreigners amounted to PLN 60.1 billion, and imports on services purchased from non-residents to PLN 39.0 billion. When compared with Q4 2016, exports on services were higher by PLN 6.6 billion i.e. 12.3% and imports increased by PLN 1.8 billion i.e. 4.7%. In Q4 2017, the balance on services was positive and amounted to PLN 21.1 billion. The figure was determined by positive balances on other services which amounted to PLN 9.7 billion (up by PLN 3.0 billion when compared with Q4 2016), transportation in the amount of PLN 7.2 billion (up by PLN 1.2 billion) and surplus in travel, which stood at PLN 4.2 billion (up by PLN 0.7 billion). Primary income In Q4 2017, the negative balance on primary income amounted to PLN 19.3 billion and was influenced by the negative balance of investment income (PLN 16.9 billion) and compensation of employees (PLN 2.4 billion). The negative balance on investment income was driven by foreign direct investors income amounting to PLN 16.4 billion down by PLN 1.3 billion when compared with the corresponding period of 2016. Direct investment 2 / 7

income consisted of: reinvested earnings of PLN 9.9 billion, dividends in the amount of PLN 3.7 billion, and interest on debt instruments in the amount PLN 2.8 billion. The negative balance on primary income was also influenced by non-residents income on portfolio investments in Poland (i.e. interest on debt securities issued by Polish entities and dividends paid). These amounted to PLN 3.5 billion down by 6.2% when compared with Q4 2016. Non-residents income on other investments stood at PLN 1.9 billion down by 3.9% when compared with Q4 2016. Secondary income of other sectors The secondary income balance of other sectors was positive and amounted to PLN 2.1 billion. Credits on secondary income amounted to PLN 4.8 billion, of which PLN 2.9 billion were workers remittances. Debits stood at PLN 2.7 billion. EU transfers In Q4 2017, the inflow of funds from the EU, as shown in balance of payments, amounted to PLN 18.2 billion. Inflow in the current account amounted to PLN 3.6 billion, of which inflow shown in primary income amounted to PLN 0.8 billion (mostly under the Common Agricultural Policy) and in secondary income it amounted to PLN 2.8 billion (mostly under European Social Fund). The inflow of capital transfers stood at PLN 14.6 billion (under European Regional Development Fund PLN 8.2 billion and Cohesion Fund PLN 6.4 billion). In the same period, Poland s membership premiums paid to the EU budget amounted to PLN 4.5 billion. As a result of these transactions, the balance of EU transfers in Q4 2017 was positive and amounted to PLN 13.7 billion. Financial account (net assets) The inflow of capital from non-resident investment in Poland (increase in liabilities) amounted to PLN 15.6 billion. In the same period, Polish investment abroad increased by PLN 21.9 billion (outflow of capital). Foreign investment (liabilities) The balance of foreign investment in Poland was primarily influenced by capital inflow from direct and portfolio investment. The balance of direct investment on the liabilities side was positive and amounted to PLN 11.1 billion. It was influenced by inflow of equity capital (PLN 5.2 billion), reinvestment of earnings (PLN 9.9 billion) and outflow of capital against debt instruments (PLN 4.0 billion). 3 / 7

In Q4 2017, balance on foreign portfolio investment was positive and amounted to PLN 3.8 billion and was the result of an investment inflow of PLN 2.2 billion to equity securities and the inflow of capital investment in Polish debt securities, amounted to PLN 1.6 billion. The outflow of investment from debt securities issued by the State Treasury (PLN 2.7 billion) accompanied purchase of bonds issued by Polish banks (PLN 4.3 billion). Graph 2. Foreign investment in Poland, PLN billion (liabilities) The balance of other foreign investment was positive and amounted to PLN 0.7 billion. This item was influenced by an increase in liabilities of other sectors, up by PLN 5.7 billion (mainly due to new loans received and trade credits) and decrease in liabilities of the banking sector down by PLN 3.7 billion (mostly as a result of repayment of loans received from other entities within the capital group and from international organisations). Resident investment abroad (assets) The balance of investment by residents abroad was positive mostly as a result of transactions registered in direct investment, other investment, and official reserve assets. The balance of direct investment assets was positive and amounted to PLN 10.6 billion (due to increase in assets against debt instruments standing at PLN 7.3 billion and increase in assets against equity amounting to PLN 3.3 billion). In the same period, Polish entities (mostly investment funds and pension funds) decreased their assets in the form of foreign equity securities by PLN 2.1 billion. On the other hands, banks and pension and insurance funds invested PLN 1.2 billion in debt securities. 4 / 7

The balance of other Polish investment abroad was positive and amounted to PLN 7.8 billion. This was affected by transactions executed by the banking sector, whose assets in the form of deposits in banks abroad and loans extended to non-residents increased by PLN 4.9 billion. Assets of Polish enterprise sector due to trade credits extended and other assets increased by PLN 3.5 billion which had a positive impact on the balance of other Polish investment. In Q4 2017 transactions recorded under official reserve assets amounted to PLN 5.5 billion and was influenced by NBP s own and client transactions (mainly the Ministry of Finance and the European Commission). Additional information on the balance of payments Balance of payments data for February 2018 will be released on 13 April 2018. Balance of payments data for Q1 2018 will be released on 29 June 2018. Time series of the quarterly balance of payments beginning with Q1 2004 are available at the NBP website. http://www.nbp.pl/en/statystyka/bilans_platniczy/bop_q.xlsx Time series of the monthly balance of payments beginning with January 2004 are available at the NBP website. http://www.nbp.pl/en/statystyka/bilans_platniczy/bop_m.xlsx Analytical tables of the quarterly balance of payments beginning with Q1 2004 are available at the NBP website. http://www.nbp.pl/en/statystyka/bilans_platniczy/bop_q_pln.xlsx Time series of the monthly stock of official reserve assets beginning with January 1998 are available at the NBP website. http://www.nbp.pl/en/statystyka/dwn/rez_m.xlsx 5 / 7

Balance of Payments */ mn PLN 2016 2017 IV Q 17 - III Q 17 IV Q 17 - IV Q 16 IV Q III Q IV Q Change Dynamics Change Dynamics Current Account -963 1 009 91-918 1 054 Balance on goods 2 067 2 697-2 846-5 543-4 913 Goods: exports 202 741 207 977 218 665 10 688 105,1% 15 924 107,9% Goods: imports 200 674 205 280 221 511 16 231 107,9% 20 837 110,4% Balance on Services 16 267 19 762 21 089 1 327 4 822 Services: Credit 53 511 57 920 60 095 2 175 103,8% 6 584 112,3% Services: Debit 37 244 38 158 39 006 848 102,2% 1 762 104,7% Balance on Primary Income -16 841-21 078-19 284 1 794-2 443 Primary income: credit 11 557 10 129 9 036-1 093 89,2% -2 521 78,2% Primary income: debit 28 398 31 207 28 320-2 887 90,7% -78 99,7% Balance on Secondary Income -2 456-372 1 132 1 504 3 588 Secondary income: credit 6 524 6 211 8 437 2 226 135,8% 1 913 129,3% Secondary income: debit 8 980 6 583 7 305 722 111,0% -1 675 81,3% Capital Account 8 899 4 430 14 182 9 752 5 283 Capital account: credit 10 253 4 747 14 896 10 149 313,8% 4 643 145,3% Capital account: debit 1 354 317 714 397 225,2% -640 52,7% Financial account 871-1 439 6 220 7 659 5 349 Direct investment - assets 28 467 910 10 652 9 742-17 815 Equity and investment fund shares 20 007 1 621 3 320 1 699-16 687 Debt instruments 8 460-711 7 332 8 043-1 128 Direct investment - liabilities 21 943 10 396 11 136 740-10 807 Equity and investment fund shares 14 861 9 774 15 140 5 366 279 Debt instruments 7 082 622-4 004-4 626-11 086 Portfolio investment - assets -25 404 1 757-926 -2 683 24 478 Equity securities -22 849 1 734-2 104-3 838 20 745 Debt securities -2 555 23 1 178 1 155 3 733 Portfolio investment - liabilities -7 833 2 756 3 764 1 008 11 597 Equity securities -11 089 2 059 2 207 148 13 296 Debt securities 3 256 697 1 557 860-1 699 Other investment - assets 3 451 5 708 7 779 2 071 4 328 Monetary authorities 995 548-545 -1 093-1 540 General government 144 71-133 -204-277 MFIs (excluding monetary authorities) 2 691 1 249 4 945 3 696 2 254 Other sectors -379 3 840 3 512-328 3 891 Other investment - liabilities 18 494-12 495 706 13 201-17 788 Monetary authorities 14 408-9 498-600 8 898-15 008 General government 3 599-688 -708-20 -4 307 MFIs (excluding monetary authorities) -1 449-6 184-3 732 2 452-2 283 Other sectors 1 936 3 875 5 746 1 871 3 810 Financial derivatives 759-501 -1 143-642 -1 902 Oficial reserves assets 26 202-8 656 5 464 14 120-20 738 Net Errors and Omissions -7 065-6 878-8 053-1 175-988 */ Preliminary data 6 / 7

Balance of Payments */ mn EUR 2016 2017 III Q 17 - II Q 17 III Q 17 - III Q 16 III Q II Q III Q Change Dynamics Change Dynamics Current Account -221 243 23-220 244 Balance on goods 472 634-672 -1 306-1 144 Goods: exports 46 325 48 850 51 662 2 812 105,8% 5 337 111,5% Goods: imports 45 853 48 216 52 334 4 118 108,5% 6 481 114,1% Balance on Services 3 716 4 645 4 982 337 1 266 Services: Credit 12 226 13 605 14 197 592 104,4% 1 971 116,1% Services: Debit 8 510 8 960 9 215 255 102,8% 705 108,3% Balance on Primary Income -3 847-4 949-4 556 393-709 Primary income: credit 2 642 2 382 2 135-247 89,6% -507 80,8% Primary income: debit 6 489 7 331 6 691-640 91,3% 202 103,1% Balance on Secondary Income -562-87 269 356 831 Secondary income: credit 1 490 1 459 1 994 535 136,7% 504 133,8% Secondary income: debit 2 052 1 546 1 725 179 111,6% -327 84,1% Capital Account 2 034 1 041 3 350 2 309 1 316 Capital account: credit 2 343 1 115 3 519 2 404 315,6% 1 176 150,2% Capital account: debit 309 74 169 95 228,4% -140 54,7% Financial account 192-341 1 465 1 806 1 273 Direct investment - assets 6 503 214 2 517 2 303-3 986 Equity and investment fund shares 4 570 381 785 404-3 785 Debt instruments 1 933-167 1 732 1 899-201 Direct investment - liabilities 5 014 2 444 2 633 189-2 381 Equity and investment fund shares 3 396 2 297 3 578 1 281 182 Debt instruments 1 618 147-945 -1 092-2 563 Portfolio investment - assets -5 805 413-218 -631 5 587 Equity securities -5 221 407-497 -904 4 724 Debt securities -584 6 279 273 863 Portfolio investment - liabilities -1 790 648 890 242 2 680 Equity securities -2 534 484 522 38 3 056 Debt securities 744 164 368 204-376 Other investment - assets 784 1 338 1 836 498 1 052 Monetary authorities 227 129-129 -258-356 General government 32 16-32 -48-64 MFIs (excluding monetary authorities) 614 293 1 168 875 554 Other sectors -89 900 829-71 918 Other investment - liabilities 4 227-2 936 168 3 104-4 059 Monetary authorities 3 292-2 231-142 2 089-3 434 General government 823-162 -167-5 -990 MFIs (excluding monetary authorities) -331-1 453-882 571-551 Other sectors 443 910 1 359 449 916 Financial derivatives 174-118 -270-152 -444 Oficial reserves assets 5 987-2 032 1 291 3 323-4 696 Net Errors and Omissions -1 621-1 625-1 908-283 -287 */ Preliminary data 7 / 7