Latest news with #central
Straits Times
3 days ago
- Business
- Straits Times
Polish nationalist's election victory deepens fiscal uncertainty
Karol Nawrocki, a Polish presidential candidate supported by the main opposition party Law and Justice (PiS), reacts to the exit polls for the first round of Poland's presidential election, in Gdansk, Poland, May 18, 2025. REUTERS/Lukasz Glowala/File Photo Polish presidential candidate Karol Nawrocki, backed by the main opposition Law and Justice (PiS) party, and his son Antoni, show a victory sign as they react to the exit polls of the second round of the presidential election, in Warsaw, Poland, June 1, 2025. REUTERS/Aleksandra Szmigiel WARSAW/LONDON - Poland's path to narrowing its fiscal deficit, maintaining its credit ratings and keeping investors on board looks more difficult following conservative nationalist Karol Nawrocki's presidential election triumph. Nawrocki's victory in Sunday's election could deal a blow to the centrist government's efforts to cement the European Union and NATO member state's pro-European orientation. Poland faces big spending demands, including a rise in defence outlays after Russia's invasion of Ukraine, and is grappling with the EU's second-highest fiscal deficit, driven in part by what are widely seen as generous social policies. Prime Minister Donald Tusk, who returned to power in 2023, has struggled to fulfil electoral promises that could strain public finances and the outgoing president, Andrzej Duda, has used his presidential veto powers to block some of Tusk's political agenda. Nawrocki, who like Duda is aligned with the opposition, could employ similar tactics, possibly delaying reforms and increasing the government's reliance on fiscal measures in the run-up to a 2027 national election. "The Nawrocki presidency will fuel domestic political instability. Tusk's reform agenda will be paralysed," Eurasia group analyst Orsolya Raczova said in a note, adding that Nawrocki could "actively stoke tension among coalition partners." S&P Global said that, at a minimum, Tusk could during Nawrocki's presidency expect similarly "uneasy relations" between the president and the government, and that Poland's economic strength and medium-term fiscal policies would remain the most important factors for Poland's credit rating. Poland has pledged to bring its budget deficit below 3% of gross domestic product by 2028, but, given the high-stakes election calendar, Tusk's government has ramped up borrowing to record levels ahead of the presidential ballot. UNDER PRESSURE Polish stocks fell on Monday from near 14-year-highs, underperforming central European peers, and Poland's international bonds also came under pressure, with longer-dated maturities down between 0.5-0.7 cents on the euro, Tradeweb data showed. Hasnain Malik, managing director with Tellimer, said the result was a "jolt" to investors. Before Monday, the zloty had been up 11% versus the dollar this year and the local equity index had been up 40% in total U.S. dollar return terms. The International Monetary Fund projected in April that Poland's economy would grow 3.2% this year and 3.1% in 2026, and slow to 2.7% by 2030. But last month the European Commission forecast that the deficit would be more than 6% of GDP this year and next, nearly double the average for the 27-member EU and the bloc's second-highest behind Romania. The yield on Poland's 10-year domestic government bond - a key benchmark for borrowing costs - is currently at around 5.5% - below the 6% mark it hovered around for much of the first three months of the year. "Poland is likely to face continued political polarisation in the coming years, with the next general elections scheduled for 2027, potentially increasing reliance on expansionary fiscal policies and delaying fiscal consolidation," Scope Ratings said. S&P warned last week that while it was "not in a rush" to adjust Poland's 'A-' credit rating, the deep polarisation in Polish politics made lowering deficits potentially risky. Poland has a narrow window before the next election to craft a medium-term fiscal adjustment. Some economic analysts say its ability to do so now looks more uncertain. "It is likely to be increasingly more challenging to implement fiscal tightening measures after the loss by the ruling coalition in the presidential election," Ercan Erguzel, an economist at Barclays, wrote in a note. One of Tusk's main unfulfilled electoral promises is a doubling of the income tax free threshold, with an estimated price tag of some 55 billion zloty ($14.76 billion), coming on top of social benefits already widely viewed as generous. Aleks Szczerbiak, politics professor at the University of Sussex, said Tusk's government was hostage to its income tax pledge, with cost-of-living issues still weighing on Poles despite inflation retreating. "If they get to the next election, and there's no road map and they haven't started implementing it, that tax free allowance thing is very, very difficult," he said, adding that the political demand was directly at odds with the economic imperative. "And I'm not quite sure how they're going to square that circle." REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Yahoo
3 days ago
- Business
- Yahoo
NATO east flank backs Ukraine membership, Poland, Romania and Lithuania say
By Andrius Sytas VILNIUS (Reuters) -Nordic, Baltic and central European NATO members are committed to Ukrainian membership of the military alliance, the leaders of Poland, Romania and Lithuania said following a summit of the so-called B9 and Nordic countries on Monday. NATO allies declared their support for Ukraine's "irreversible path" towards membership at last year's Washington summit. But President Donald Trump has since said that prior U.S. support for Ukraine's NATO bid was a cause of the war and has further indicated that Ukraine will not get membership. Russian President Vladimir Putin's conditions for ending the war in Ukraine include a demand that Western leaders pledge in writing to stop enlarging NATO eastwards, and lift a chunk of sanctions on Russia, Reuters reported last week. Poland, Romania and Lithuania said on Monday, after a meeting of Nordic, Baltic and Eastern European leaders in the capital of Lithuania, that the region remains committed to the path towards Ukrainian NATO membership, and called for further pressure on Russia, including more sanctions. "We stand firm on Allied decision and commitment regarding Ukraine's irreversible path to full Euro-Atlantic integration, including NATO membership. Ukraine has the right to choose its own security arrangements and to decide its own future, free from outside interference," they said in a joint statement released on behalf of all meeting participants. The meeting, held ahead of a NATO summit at The Hague later this month, included Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Slovakia, Denmark, Finland, Iceland, Norway, and Sweden.
Hindustan Times
3 days ago
- Politics
- Hindustan Times
NATO east flank backs Ukraine membership, Poland, Romania and Lithuania say
VILNIUS -Nordic, Baltic and central European NATO members are committed to Ukrainian membership of the military alliance, the leaders of Poland, Romania and Lithuania said following a summit of the so-called B9 and Nordic countries on Monday. NATO allies declared their support for Ukraine's "irreversible path" towards membership at last year's Washington summit. But President Donald Trump has since said that prior U.S. support for Ukraine's NATO bid was a cause of the war and has further indicated that Ukraine will not get membership. Russian President Vladimir Putin's conditions for ending the war in Ukraine include a demand that Western leaders pledge in writing to stop enlarging NATO eastwards, and lift a chunk of sanctions on Russia, Reuters reported last week. Poland, Romania and Lithuania said on Monday, after a meeting of Nordic, Baltic and Eastern European leaders in the capital of Lithuania, that the region remains committed to the path towards Ukrainian NATO membership, and called for further pressure on Russia, including more sanctions. "We stand firm on Allied decision and commitment regarding Ukraine's irreversible path to full Euro-Atlantic integration, including NATO membership. Ukraine has the right to choose its own security arrangements and to decide its own future, free from outside interference," they said in a joint statement released on behalf of all meeting participants. The meeting, held ahead of a NATO summit at The Hague later this month, included Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Slovakia, Denmark, Finland, Iceland, Norway, and Sweden.
Yahoo
7 days ago
- Business
- Yahoo
Czech economy accelerates in first quarter on higher household spending
PRAGUE (Reuters) -Czech economic output jumped by a faster-than-predicted 0.8% in the first quarter, the highest since late 2021, driven by a strong rebound in household spending and inventories, the Czech Statistical Bureau (CSU) said on Friday. The result marked an increase from a flash estimate of 0.5% expansion, and put year-on-year growth at 2.2%. The central European economy has been slow to recover from the COVID pandemic, which was followed by an inflation wave, high energy prices and weak demand in main trade partner Germany. A gradual rebound in real wages, as inflation waned, has been the main driver of the recovery. The CSU said household demand contributed 1.5 percentage points to the year-on-year expansion, followed by inventory adding 1.3 points, government spending with 0.4, while foreign trade and capital investments had negative contributions. "The year-on-year result is the best in nearly three years and was caused mainly by growing household spending," said Petr Dufek, chief economist at Banka Creditas. "The first quarter result lays the ground quite well for the full-year growth of roughly 2%." Chief Economist Pavel Sobisek of UniCredit CZ+SK said momentum would help the economy going forward but there would be negative effects of U.S. tariff policies. "That will undoubtedly cause fluctuations of growth and its overall reduction versus a situation of tariffs not being imposed," he said in a note. The crown was trading flat versus the euro at 24.945. Sign in to access your portfolio
Iraqi News
25-05-2025
- Business
- Iraqi News
Iraq seeks to accelerate gas supplies from Turkmenistan
Baghdad ( – The Iraqi Minister of Electricity, Ziyad Ali Fadel, arrived in Turkmenistan on Sunday to discuss accelerating gas supplies to Iraq. According to a statement released by the Electricity Ministry, Fadel's visit to Turkmenistan aims to speed the fulfillment of a gas supply contract with Iraq. Iraq signed a memorandum of understanding in 2023 with Turkmenistan to import the gas it needs to operate its power plants, according to the Ministry of Electricity, which indicated that the step requires additional negotiations related to the mechanism of transporting gas through Iran. Power plants in Iraq depend on gas imports from Iran, which cover one-third of the country's energy needs. Fadel previously stated that Iraq will receive gas from Turkmenistan via the pipeline network in Iran, which is connected to Iraq and will ultimately supply the power plants in the country. The agreement will enable the transportation of Turkmen gas to Iraq through Iran over a five-year period. Iraq has reportedly completed all the necessary requirements to begin importing gas from Turkmenistan in January 2024. The primary cause of the delivery's planned deferral is the requirement to negotiate a thorough arrangement with Iran, the country of transit. The Ministry of Foreign Affairs of Turkmenistan said earlier that the country will sell 10 billion cubic meters of natural gas annually to Iraq through a swap arrangement with Iran. The gas-rich central Asian country has a pipeline that connects to Iran, which borders Iraq.
