The International Monetary Fund on Friday approved a new $30 billion credit line for Poland amid worries that financial turbulence in other parts of Europe might spread. It is Poland's third IMF Flexible Credit Line (FCL) since 2009 and by far the largest. The last two were equivalent to about $21 billion.
"Sizable downside risks remain, particularly from the possibility of further spillovers of financial turbulence in other parts of Europe," the IMF's first deputy managing director, John Lipsky, said in a statement. "Against this background, the ... board approved the authorities' request for a new arrangement."
Poland is one of Eastern Europe's most resilient economies and was the second country, after Mexico, to seek access to the IMF facility designed for emerging economies with strong economic fundamentals. The FCL was created in the midst of the global financial crisis in March 2009 as a type of insurance to protect strong performers that may be affected by economic spillovers from other countries.
Poland's first FCL was approved in May 2009 and renewed in July 2010. Lipsky said economic growth in Poland was likely to remain "solid and balanced" and the approval of the new arrangement underlined IMF support for the authorities policies.
IMF mission chief to Poland, James Morsink, told a conference call with reporters that growth was projected to remain about 4 percent over the next few years although it could moderate slightly alongside planned fiscal cutbacks this year. He said Polish authorities were appropriately tightening monetary policy.
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