4.97 percent — that’s profitability (hereafter the equivalent of the interest paid from our taxes to bond purchasers) Polish 10-year treasury bonds In quotes on Wednesday. The first downward breakout of five percent occurred on Tuesday, but the close of the day was once again above that mark. But on Wednesday, the rankings appear to want to stabilize at the levels of the top four.
See also: New OECD forecasts for Poland. How long will we wait for the economy to recover?
In December, yields fell by 0.53 percentage points. To show the scale of this phenomenon, if the interest rate on the entire state treasury debt fell by this much, the savings could amount to PLN 7 billion per year on interest payments. In 2024 alone, the government must borrow over PLN 420 billion (and perhaps more after new spending plans), saving 0.53 percentage points. The benefits will result in savings of PLN 2.2 billion in annual expenses. Since September, the yield on Polish 10-year bonds has fallen by as much as 0.93 percentage points.
Profitability of 10-year Polish bonds
|
Stoq.pl
The previous increase in interest rates led to a wave of inflation and higher interest rates this year until October The cost of debt servicing amounted to PLN 45 billion, or 8.8%. state expenditures, While a year ago in the same period it was 24 billion Polish zlotys and 6%. Expenses. In the current year Already 9.5 percent of taxes paid by Poles was used to pay off debts.
The transcript continues below the video
Interestingly, the recent decline in our bond yields is still ongoing, and the new government has just announced an increase in the already huge budget deficit. The offering will amount to PLN 180 billion, not PLN 165 billion as in the law prepared during the PiS government, which means it will be PLN 15 billion larger. The new costs introduced by the new government are expected to reach PLN 40-45 billion, so, like his predecessors, it seems that many expenses will be shifted outside the budget, although Minister Domanski talks about looking for savings, among other things. In the form of unfreezing energy prices starting mid-year. If this is the case, why are returns falling? Is the assessment of Donald Tusk’s government that good even before he begins governing in earnest?
This is about something else. Inflation is falling around the world and interest rates are expected to be lowered. Therefore, new bonds will soon be sold to economic powers at lower interest rates than before. Since those bonds will pay less, Polish bonds will also benefit, especially since the zloty is strong, so foreign investors do not risk much by buying Polish debt.
The yield on 10-year German government bonds fell by 0.48 percentage points in December and by 0.89 percentage points since September. This is approximately equivalent to the value of Polish bonds (0.53 percentage points and 0.93 percentage points, respectively). This is already a trend that precedes the decisions expected from central banks. What will save our public finances?
Author: Jacek Fracek, journalist at Business Insider Polska
Echo Richards embodies a personality that is a delightful contradiction: a humble musicaholic who never brags about her expansive knowledge of both classic and contemporary tunes. Infuriatingly modest, one would never know from a mere conversation how deeply entrenched she is in the world of music. This passion seamlessly translates into her problem-solving skills, with Echo often drawing inspiration from melodies and rhythms. A voracious reader, she dives deep into literature, using stories to influence her own hardcore writing. Her spirited advocacy for alcohol isn’t about mere indulgence, but about celebrating life’s poignant moments.
