Franchise borrowers suspend repayments, the “Kredyt na start” program may never be created, and banks are setting a record for mortgages (MORNING BRIEF)

Luc Williams

Here's your morning brief – everything you need to know about what's happening in the economy right now.

Today, inflation for May is expected to increase to 2.8%.

Annual inflation in May has grown to 2.8 percentc. from 2.4 percent in April – these are the expectations on the financial market. We will find out today at 10:00 whether they are true to reality The Central Statistical Office will release preliminary inflation data for May. Price level in stores According to forecasts, it was to increase by 0.4% in May compared to April. that is, quite significantly. Continued transmission from stores to consumers is likely responsible for this costs of increasing VAT on food, which appeared on April 1. It was because of it that the price level rose by 1% in April, and economists commented then that this was only about half of the effect of the increase. The effects of the second half were to appear within the next few months.

In the following months, inflation will probably increase also because exactly a year ago, in the period from May to September, the price level in Poland decreased slightly instead of increasing. This year it will be rather difficult to achieve, especially since electricity and gas prices will increase from July. As a result, according to many economists, Mrthe inflation level in Poland will reach around 4-5% by the end of the year.

Inflation may reach 6% at the beginning of 2025.

However, the price increase will not end at the end of the year and as a result at the end of the first quarter of 2025, inflation in Poland will reach up to 6%.. – this is the view of Łukasz Tarnawa, chief economist of Bank Ochrony Środowiska. In his opinion, inflation will exceed 5% at the end of this year. because core inflationi.e. the one without food and energy prices will continue to increase, and what's more food will be more expensive due to VATa energy by increasing prices from July. It is worth noting, however, that the Energy Voucher Act, which mitigates this price increase, is to remain in force only until the end of the year. So from January it will be back on electricity bills capacity fee, which will now be gone for half a year. Moreover, from January we will return to the system in which prices of energy carriers for households they only depend on tariffs approved by the Energy Regulatory Officewithout additional intervention from the state.
The chief economist of BOŚ assumes that “the increase in electricity bills this year will amount to around 20%, and for gas – approximately 15%. and for heat 15%. this year and another 15 percent. next year.”
This is all supposed to mean that The Monetary Policy Council she will not be inclined to do so at all lowering interest rates at the beginning of next year. The first cuts will come later, when inflation starts to fall again. In the base scenario, BOŚ assumes the first one in September and the second one in November 2025. Previously, reductions may only appear in the event of another significant weakening of the Polish economy, resulting, for example, from a new global crisis.

Banks assume that there will probably be no “Starting Loan”, but that's okay

Personnel changes in the Ministry of Development and Technology caused that there are basically no discussions on this topic at the moment” – these are the words of the president of AMRON, Jacek Furga, about what is currently happening around a new government program for subsidizing interest on housing loans. Or rather, probably not about what isn't happening.
AMRON is a center associated with the Polish Bank Association for analyzing what is happening on the Polish real estate market. The statement of the head of this institution is another signal suggesting that the concept of the so-called“zero percent loan”which was promised during the election campaign last year, she probably died politically. An idea for a long time The Left did not like itand last Sunday Szymon Hołownia, the leader of Poland 2050, also withdrew support for it. At this point, the Civic Coalition, if it wanted to pass regulations related to this, would would have to count on help from PiS.

By the way, according to the head of AMRON, even if the act on the program was officially called “Start-up loan” came into force, its impact on the market would be much smaller than last year's program “Safe loan 2 percent”, because the new program “is complicated.” They appear there, for example income thresholds – only those who have it would receive state support appropriately low income.

According to Furga, banks will grant loans this year anyway 170-180 thousand new housing loans, which is more than last year. He believes this view is supported by the current situation. In the first quarter, banks granted 64 thousand loans, half of which concerned applications from the old “2% loans” program. Another 16,000 were granted in April. loans, without any government program.

New programif he were to appear, would probably add about 30,000. credits, but even without it, if the current rate of lending is maintained, banks should grant nearly PLN 200,000 throughout the year. new housing loans.

Franc borrowers stop repaying their loans even before the court verdicts

By the way, the above-mentioned AMRON has just published an interesting report that shows what is now happening with Swiss franc loans, which were granted many years ago. It turns out that they are getting worse and worsebut the point is not that some of them are invalidated by the courts or are subject to transformation into PLN loans as part of an agreement with the bank. These are loans for which nothing has happened formally yet, so they should be repaid. But increasingly they are not.

The report stated that in the case of housing loans in PLN the share of those at risk (i.e. those that have stopped being repaid) is only 1.47%. the entire portfolio. However, in the case of Swiss franc loans this share has just increased to 16.02%. so it is almost eleven times larger. At the end of last year, this percentage was 12.4%. and a year ago 8.6 percent so you can see the growth here very quickly.

This does not mean, however, that the holders of these loans suddenly find themselves in financial difficulties that prevent them from continuing to service their obligations. The AMRON report wrote that: “specialists believe that the reason is not the poor condition of Swiss franc borrowers, but their a conscious decision not to repay the obligation due to entering into a court dispute with the bank. The total number of lawsuits in these cases is over 160,000. make it happen”.

So it looks like those who They take Swiss franc loans to courtthey do not wait for final judgments, only they stop repaying them immediatelyassuming that “in a moment” (although in reality maybe only in a few years, taking into account the pace of work of courts in Poland) and so these loans will be invalidated.

Perhaps that is why the head of the Polish Bank Association, Tadeusz Białek, said that Work is underway on a new, more attractive settlement model for clients regarding Swiss franc loans. Details of this new model are expected to be announced within a month.

IMF: Germany should borrow a little more

International Monetary Fund thinks Germany should loosen its rules on public debt, because the current ones are too strict and restrictive and, as a result, they harm the economy, hindering its development.

In a new assessment of the German economy, the IMF notes that it is recovering from the crisis, wages are rising again in real terms, which should fuel consumption growth, and therefore also GDP growth, especially since inflation should continue to decline. However, in the long term German economy is burdened by bad demographic changes that will burden public finances. As a result, in the long run Germany's GDP will be able to grow slowly, only about 0.7 percent. annually.

In this context, as well as in connection with the additional needs related to defense spending The IMF writes that current spending rules, which are very limiting the possibility of financing the economy from the budget deficitare excessively restrictive and even if the annual limit for taking out new debt was increased by 1%. GDP (i.e. in the case of Germany by about EUR 42 billion), is public debt to GDP ratio would still be in a downward trend. And at the same time, the country would have more resources to finance increased spending needs, and at the same time infrastructure investments that would improve the efficiency of the German economy.

The German government has not officially commented on these advice, but Reuters quotes sources in the Ministry of Finance in Berlin as saying loosening fiscal rules is a bad ideabecause “it may result in a renewed increase in inflation, which has only just begun to decline.”

Moreover, to Germany to change the rules regarding public debt and the scale of public spending, as many as two-thirds of the votes in both houses of parliament are needed. Therefore, it is politically impossible today.


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