Record trade surplus in November at EUR 1.9 bn as import values fall

The total value of imports fell by 4.6 percent, and exports dropped by one percent, resulting in a EUR 1.9 bn trade balance in November, according to the National Bank of Poland economists. Combined with a leap in the value of net export of services of EUR 2.33 bn, the total surplus is EUR 3.2 bn, which is the highest since records began in 2004.

Economists believe that the positive trade balance could have added as much as 0.8 percentage points to third quarter economic growth and figure that the same may be true for the fourth quarter.

Imports dropped compared to November 2018 because the price of imported fuel was considerably lower at the end of last year. Another contributory factor was that imports of semi-finished goods dropped.

Premier Matuesz Morawiecki tweeted a very positive response to the high surplus. “Capital has a nationality, let’s make it Polish.”


Cheaper fuel only good for the economy

As the fears of conflict in Iran fade, the price of crude oil has again stabilised at a low level, which is a gift to importing nations. Imports of fuel (oil, coal and gas) make up a significant portion of Poland’s import bills. Moreover, liquid fuels consumption rose 4.0 percent in the first three quarters of the year, according to the Oil Producers and Retailers POPHiN. Crude is imported but only 31 percent of the refined products: petrol, diesel etc were imported, as opposed to 33 percent in 2018.

Coal imports rose to 20 mln tonnes in 2018 but are expected to drop to 17 mln at the 2019 year end, the Energy Ministry has forecast, and prices have also fallen significantly from 2018 highs. Poland has also reduced its more expensive gas imports from Russia, partially replacing them with cheaper LNG imports from the US and Qatar.

Fears for exports?

On the other hand industrial orders have declined by two percent in November, while export orders declined by 10 percent. This is an early warning sign that exports a month or two down the line will be declining. Goldman Sachs economist Jari Stehn has said earlier this month, however, that the European economy is bottoming out, as the combination of the worst fears of hard Brexit and a breakdown of Trade with China fade, which can only benefit Poland’s exports to its main trading partner, Germany.