Polish central banker says pension changes can boost economy
By Karolina Slowikowska and Pawel Florkiewicz
WARSAW (Reuters) - A Polish central bank policymaker has defended the government's decision to transfer more than half of private pension fund assets to the state, saying the move would give the economy a vital investment boost.
Anna Zielinska-Glebocka told Reuters Poland would not be able to reach potential growth levels of 3.0-4.0 percent, up from 0.8 percent, unless domestic demand reinforced the current main driver, exports.
"Changes to the pension system are positive and create a chance for an impulse, for a growth engine, in the form of investments that are so important. This will be helping the economy in 2014, although mostly in 2015," Zielinska-Glebocka said in comments made on Thursday and authorized for release on Saturday.
"Investments and consumption demand are key for the Polish economy. A healthy economy must be based on domestic demand, not just exports. From this perspective changes to pensions are a good move," she said.
Poland, the largest of central Europe's emerging economies, said on Wednesday it would transfer many of the assets held by private pension funds, including treasury bonds, to a state vehicle. This means the government can book those assets on the state balance sheet to offset public debt, giving it more scope to borrow and spend.
Stock .WIG20 and bond prices fell as investors - including the pension funds - registered alarm that the government was reversing its business-friendly stance.
"The current situation on the currency market is temporary. It will be a short-lived reaction, 'just in case'. I think that 4.30 is not a level that will stay for longer, the zloty will soon gain slightly," Zielinska-Glebocka said.
"At this moment markets remain vulnerable, but mostly because of global factors, such as the Fed's scaling down of its quantitative easing." Continued...