The Zloty Index by Cinkciarz.pl. August 2015. Part 1

The zloty has returned to the hikes from July. As a result, the price competitiveness of the export fell almost on all markets. Such unfavorable tendencies are visible on the Scandinavian and Central-European markets. The Polish currency remains relatively strong in a several years perspective.

June was the month of wide wear off on the zloty. This was indicated by an improvement of competitiveness of Polish export on almost every market. The only exception was in the region of Central and Eastern Europe, where after last month's improvement unfavorable tendencies seem to intensify again. However, the Polish currency remains relatively strong in the long perspective.

June was another month of improvement in price competitiveness of Polish export. The only exception was the region of Central and Eastern Europe. In the case of these countries we are dealing with a new cumulation of unfavorable tendencies. They are probably caused by the overvalue of the Russian rouble and the Ukrainian hryvnia. On the other hand, after excluding the countries in crisis (the CEE_NO_CR index), wear off on the zloty is visible.

The estimation of price competitiveness from the perspective of the past twelve months shows that we are dealing with a nominal increase in the zloty's rate on the majority of markets. The exceptions are the basket of the emerging markets, and the CEE_NO_CR basket (decrease by 0.3%). In the case of the CEE index we are observing a return to strong hikes – in June the nominal index was above 14.2% in relation to last year. One month earlier it was 12.6%. In the case of real indexes we can observe a wide wear off of the zloty with two exceptions – the CEE index and the SCAN index (Scandinavian countries).

June's improvement in price competitiveness of Polish export is an advantageous phenomena for our economy. Its source is however problematic. It comes from a cumulation of anxieties regarding the future of Greece. After the introduction of capital control in this country, it needs to make a decision regarding its membership in the eurozone. Uncertainty coming from the Greek crisis is responsible for the aversion towards risk which is having an impact on the zloty. Although we are yesing advantage of the currency rate's wear off, we are unable to precisely estimate the economic consequences of the Greek crisis. In the forthcoming months, further wear off on the zloty can be expected due to the initiation of the monetary policy tightening in the USA. Just like in the case of the Greek crisis it is difficult to estimate this factor's significance for the economy.

Index Cinkciarz.pl dla koszyka krajów Europy Środkowo-Wschodniej pokazuje spadek wartości złotego już od trzech miesięcy. Mimo to w maju Index był wyższy aż o 12.6 procent wobec poprzedniego roku. W przypadku indeksu realnego obserwujemy podobną tendencję. W ujęciu realnym złoty umocnił się wobec poprzedniego roku w stosunku o 2.1 procent (jeszcze w styczniu było to 6.2 proc.).

The phenomena of increasing share of significant trade partners in general export is constantly observable. The contribution of Germany in export increased from 26.3% last month, to 26.8% currently. This phenomena is unambiguously disadvantageous in the macro-prudential policy context (this matter was described in more depth in the recent report).

The Cinkciarz.pl SCAN index (the basket of Scandinavian countries) shows a consequent deterioration of price competitiveness of Polish export in this region. At the same time we can observe a decrease in export to these countries. A strong decrease in sales to Norway is especially responsible for this situation, although intensification of unfavorable tendencies is also visible in the case of other countries. This topic will be widely commented on in July's report.

Conclusion: Cinkciarz.pl Indexes and the changes of indexes

Indeks nominalny

Chart: Value of the nominal index. Data: Cinkciarz.pl

Chart: Change of the nominal index year on year (in percent). Data: Cinkciarz.pl

Chart: Change of the nominal index month on month (in percent). Data: Cinkciarz.pl

Indeks realny

Chart: Value of the real index. Data: Cinkciarz.pl

Chart: Change of the real index year on year (in percent). Data: Cinkciarz.pl

Chart: Change of the real index month on month (in percent). Data: Cinkciarz.pl

Podsumowanie: eksport i udział w eksporcie w podziale na koszyki

Chart: Change of export month on month (in percent). Data: GUS; Analysis: Cinkciarz.pl

Chart: Change of export year on year (in percent). Data: GUS; Analysis: Cinkciarz.pl

Chart: Contribution of the basket in general export (in percent). Data: GUS; Analysis: Cinkciarz.pl

Content of the currency baskets

Chart: Content of baskets of the countries. Source: Cinkciarz.pl

Part 2 of the report