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Poland and Turkey – Countries in an oasis of financial calm but with growth as the new economic tigers of Europe.

Skrivet av Andrej Scepanski Monday, 17 September 2012.

Poland and Turkey – Countries in an oasis of financial calm but with growth as the new economic tigers of Europe.

These two countries may be glad not to be in the euro. Strong GDP growth and economic growth as well as resistance to financial crises is creating good investment opportunities.

For investors who are willing to invest and are somewhat more risk-located (Turkey?) higher rewards might await.

In Europe's current economic situation, when the eurozone teetering on the brink of disaster and several countries are once again heading into a recession, there are actually countries that seem to be in an oasis of financial calm. "Market Watch", an American portal for active investors out in its latest report that it is Poland and Turkey that is in an oasis of financial calm while being the new (new-old) economic tigers in Europe. What advantages is there in Poland?

• Young, curious and well educated hardworking population,

• Rapidly growing, prosperous middle class

• Large internal market with growth-promoting domestic consumption (> 53% of GDP)

• Extremely entrepreneurial entrepreneurs

• Steady growth ofexports (> 30% of GDP)

• Boom in infrastructure and construction sectors

Poland and Turkey are now described as a part of the economic frontrunners. In other parts of the world are the new countries will take the leadership role away from other growth-saturated countries: In South America - Peru and Columbia, in Asia - the Philippines and Indonesia. It is not the markets that are used to be on the frontpages or even presented in headlines but the good condition of their economies attracts the glances of investors and the financial communities all over the world. This is particularly interesting because of that the spotlights turns away from the slowing down BRIC countries and is now directed on these new contenders. Is it time for a new era where BRIC will be mentioned in the footnotes while the new PPIPT countries, namely Poland, Peru, Indonesia, the Philippines and Turkey will dominate the headlines. In comparison to the BRIC countries (and basically the rest of the world as well) the Polish economy did not fall into a recession in 2009, and the current debt crisis in the Eurozone has not slowed down its economy with its large internal market. Its exports to Germany which is known for as Europe's largest economy is steadily growing (> 20% of total exports). The future looks bright when the revolution in the energy sector steps up a level and the demand of shale gas increases and Poland’s huge reserves of shale gas will be of exploitation.

At the same time it must be remembered that the stock exchange in Warsaw, the WIG20 is at the lowest level for two years, which in itself creates good opportunities for new share purchases at rebates and the Polish zloty has weakened against the euro, which promotes exports.

So, can an annual growth of 4% be defined as a tiger economy? In comparison with China's or India's growth of around 10% it seems farfetched, but in comparison with the rest of Europe, absolutely. Since the crash of Lehman Brothers in September 2008, the Polish economy has grown by over 15%. Poland's strong position confirms the inflow of foreign capital. Direct foreign investments in Poland in 2011 ended up at 11.8b. USD (record year 2007: 22.8b. USD) and in Turkey 16.1b. USD which is the most since 2007.

The acquisition of the Polish Kredyt Bank, made by the Spanish bank Santander is probably a good sign of the opportunities that can be found. Spain in comparison to Poland has huge problems in their domestic market with their borrowers that are not able to amortize nor pay the interest on their loans. The acquisition then makes sense for the Spanish giant bank to purchase foreign one strong bases and functioning in a healthy and stable markets. If and how the bankrupt Greece will affect Poland depends on whether the foreign banks acting on the Polish market will be tempted to transfer their money to their HQ.

Om Krönikören

Andrej Scepanski

Artisma Consulting AB

Andrej Scepanski, VD

Phone +46 70 7552872

Fax:   +46  8 7470999

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