1. The government changes its fiscal policy, and austerity comes
we bring More signals Demonstrate that the government intends to review its current fiscal policy. Now less money will be spent thus helping to fight inflation.
At the Ministry of Finance, we are of course aware that an increase in public spending may delay the decline in inflation to more acceptable levels, and therefore we intend to be very careful with new spending. Our plans aim to reduce public sector spending in relation to GDP from 44.4%. reach 42.4 percent in 2025
– said Finance Minister Magdalena Rzekowska.
A 2% reduction in the expenditure measure will not mean a nominal decrease in GDP, as GDP is expected to grow year on year, but it will likely mean increases in spending less than inflation. Given that some of the state’s military spending is expected to grow exponentially, the rest will be a bit of a pull. Earlier, over the weekend, PiS was surprised by not announcing the indexing of the 500 plus program that was previously announced through media leaks. Some economists are beginning to see this as significant changes in fiscal policy.
In recent months, the government has pursued a loose fiscal policy, which has led to increased spending, which means increased demand in the economy. This was criticized by many economists, who believed that such a policy helped increase inflation. Recently, even former and current members of the Monetary Policy Board have joined in with this criticism, claiming that accommodative fiscal policy is dampening the effects of monetary tightening, so that inflation cannot begin to fall. The minister’s words suggest that the government has noticed this and intends to change it.
2. The collapse of car sales in Russia
New car sales in Russia fell 84 percent in May. Compared to May last year – Bloomberg writes. The new owners found just over 24 thousand. to me. For comparison: in Poland in May, more than 41 thousand. to meWhich means a decrease of 12.8 percent. every year. While we and all of Europe are facing recessions related to industrialization problems in the industry, Russia is going through a complete collapse on one side of demand and the other side of production. Their May sales were nearly a tenth of what they sold in their markets in the good times of 2011-2014 and a sixth of what they sold in 2015-2021.
Sanctions imposed on Russia after its attack on Ukraine cut it off from foreign technology and capital, while almost all global auto brands have pulled out of the country. As a result, Russia today is not able to produce cars on its own, because it cannot import the necessary parts, nor does it have access to cars manufactured abroad, because there are no longer foreign concerns about cars. You can buy only what was produced before the war and has not been sold until today.
3. A political brawl in Brussels over the Polish KPO
The European Commission has already agreed to mobilize the EU’s reconstruction fund for Poland, but this issue is still waking up in the EU big controversy And it may have political repercussions. The Organization for Renewing Europe, which is part of the coalition that forms the majority of the European Commission in the European Parliament, has threatened to do so He will demand a vote of no confidence in the Commission once the first transfer of funds to Poland is approved. This was announced by Guy Verhofstadt, a member of the European Parliament for the party.
According to Renew Europe (which includes, among other things, the party of French President Emmanuel Macron), Poland continues to ignore rulings by the Court of Justice of the European Union, and proposed changes to the law abolishing the disciplinary chamber are cosmetic and de facto. The essence of the problems with the rule of law in Poland are not solved.
Without the renewal of Europe, the European Commission does not have a majority, so it seems important. It should be noted that on June 17, the Polish KPO still needs to be approved by the Council of the European Union. Decisions there are taken by majority vote, but those related to KPOs from other countries have always been a formality. However, considering what happens, in the case of Poland it does not have to be a formality. In addition, today a debate on the Polish KPO will be held in the European Parliament, along with the adoption of a resolution.
4. The new floating LNG terminal will be twice the planned size
There will be a new floating LNG station that we intend to install somewhere in the Gdańsk منطقة Much largerthan we thought so far. Climate and Environment Minister Anna Mosqua said its capacity would be at least 12 billion cubic metres. per year, which means that in fact it will be larger than the gas station in Owenoghesi, which, even after expansion, will have a volume of about 8 billion cubic meters. annually. The floating terminal was initially planned with an area of 6 billion cubic meters.
Correction of plans by doubling the capacity is due to the fact that it will serve not only us, but also our southern neighbors.
We planned for it 6 billion cubic meters. Due to the fact that the interest of our southern neighbors, as well as Ukraine, is growing, we plan to expand it to at least 12 billion cubic meters, which means a large terminal – two ships. We are in constant dialogue with our Czech and Slovak partners to develop the final model for these contacts, but also to prepare for building relations with Ukraine.
– Moscow said during the local government conference of the Three Seas Economic Forum in Lublin.
Earlier in May, the head of Gaz-System reported that the company is in talks with the government about accelerating investment in the construction of the FSRU in the Gdańsk region, so that it ends in 2025 or earlier. The currently planned launch date for this investment is the beginning of 2028.
5. The end of the COVID-19 problem in China
China is recovering from strict lockdowns related to the COVID-19 coronavirus pandemic. The number of new infections has dropped dramatically in recent days, which means life may slowly return to normal there, as well as in Beijing and Shanghai. A sudden rise in infections in March and April and a severe reaction from the Chinese authorities pushed the Chinese economy into recession and triggered turmoil in global markets. Among other things, the world’s largest port in Shanghai was not operating. Many global banks and China economists believe that China’s GDP will fall below the first in the second quarter. Now, however, it appears that the effect of the shutdown may be temporary and short-lived.
The closures in China had one positive side: they meant a decrease in the demand for various types of raw materials in world markets, and, accordingly, increased chances of lower prices for these raw materials. Therefore, among other things, the FAO Food Price Index registered a slight decrease in April and May. At the moment, the markets are already ruling out the return of more economic activity in China, which also means increased demand for oil, among other things – and this is one of the main reasons why oil prices have recently reached $120. barrel.
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