Page 18 - Poland Outlook 2024

supportive for CEE currencies,” ING wrote in an analysis.
6.2 Stocks
The Warsaw Stock Exchange’s blue-chip index, the WIG20, experienced a remarkable gain of nearly 40% last year. To keep this positive trend in 2024, it will take a sustained economic growth – which is on the cards, analysts say.
According to a survey of Polish brokerage houses, carried out by the Rzeczpospolita newspaper in early January, the Warsaw bourse’s main index, the WIG, which finished just below 79,000 points last year – a growth of 37% – is expected to close 2024 at around 87,400 points. The range of forecasts is quite large, Rzeczpospolita notes, ranging from 75,000 to over 92,000 points.
Analysts see a slightly smaller potential in the segment of the largest companies. “The average forecast suggests that the WIG20 index should finish the current year at nearly 2,600 points, indicating a 9% rate of return. However, the most optimistic outlook places it at 2,700 points, offering over 14% growth potential,” according to the survey.
Market sensitivity is likely to persist, however, particularly towards any significant deterioration in macroeconomic data. Again, analysts expect a solid year ahead although there are serious caveats, the most important one being the volatile geopolitical situation. Poland remains adjacent to Europe’s active war zone that Ukraine has been since early 2022 after the Russian attack.
Despite a decrease in inflation and a robust labour market allowing for real wage growth, investors will closely monitor the delayed effects of monetary policy tightening, reflecting in economic data next year. If these effects are minimal, it would be another positive surprise for both markets and economists, albeit contingent on some 'ifs’ originating outside Poland.
One such “if” is that investors might anticipate a faster reversal of the current Fed policy. The impact of such a scenario on the valuations of risky assets, including emerging market indices like Poland's, remains uncertain. The continuation of this year's euphoria is by no means guaranteed in the face of potential shifts in the Fed's stance.
6.3 Bonds
Like with almost all other fundamental issues that investors will look at in the new year, Poland’s debt, borrowing plans and the fiscal soundness of the economy recovering after a major slowdown will be analysed in the context of the recent change in the government. And it seems that it will be analysed favourably – at least that has been the case early into 2024.
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