Backup cash
January 22, 2011
The International Monetary Fund has approved a two-year flexible credit arrangement for Poland worth $30 billion (22 billion euros), extending two similar, smaller loans granted in 2009 and 2010.
The IMF board said this was a precautionary measure, and that Poland had no intention of using the fund. Instead it was designed to be a safeguard against spillover troubles from other parts of the eurozone.
The IMF approved the deal on Friday as part of a lending tool created in 2009 to help countries get through the global financial crisis.
"Poland's macroeconomic performance was strong in the decade leading up to the global crisis, supported by sound economic policies," John Lipsky, acting IMF chairman, said in a statement.
Spillover risk
Lipsky added that Poland's economy had "gathered momentum" in 2010 largely because of low interest rates, limited government deficits and rising confidence in the economy.
"However, sizable downside risks remain, particularly from the possibility of further spillovers of financial turbulence in other parts of Europe," Lipsky said.
Poland was the only European Union country to avoid recession in 2009. The European Commission, however, warned this week that Warsaw was likely to miss its target for cutting the country’s budget deficit to 3 percent of economic output by next year.
Author: Joanna Impey (AFP, AP, dpa)
Editor: Toma Tasovac