PLN: Political tensions to keep zloty lagging – Commerzbank

Tatha Ghose at Commerzbank highlights rising political uncertainty in Poland, including potential vetoes of defence-related EU funding legislation and a hard-right opposition candidate for 2027. He argues these developments underscore persistent instability and reiterates Commerzbank’s view that the Polish zloty will underperform its regional peers over the coming year.

Domestic politics weigh on zloty outlook

"Tusk hinted to the media that the government will have to activate plan B and find an alternative legislation if Nawrocki were to block the legislation."

"Add to this the announcement by opposition PiS (Law and Justice) that they have selected former education minister and hard right politician, Przemyslaw Czarnek, to become the party's PM candidate for the autumn 2027 general election, and the combination highlights our oft-repeated concerns about Poland’s complex political situation, which is turning less stable as the months go by, not more."

"PiS could have gone for a more moderate candidate belonging to another wing of the party which is led by ex-PM Mateusz Morawiecki, but they decided to go the opposite route, which reveals much about their stance and election strategy."

"We forecast the zloty to remain the underperformer in its peer group over the coming year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)