In an environment of high inflation and falling money values, the banking sector would need to increase lending by PLN 408.3 billion to maintain the real scale of financing the economy, according to estimates by the Research and Analysis Team of the Polish Banks Association (ZBP).
“Both deposit growth and non-financial sector credit growth have not kept pace with inflation and therefore with the declining real value of money. In the period January 2021-June 2023, cumulative inflation reached 33.8%. During the same period, the cumulative growth rate of non-financial sector deposits reached 19.5%, while the cumulative growth rate of non-financial sector loans only reached 3.8%. The scale of shortfalls amounts to PLN 205.7 billion in the case of non-financial sector deposits and PLN 373.4 billion in the case of non-financial sector loans,” according to the report ‘Poland and Europe: innovation, investment, growth’.
In January 2021-June 2023, there was a nominal growth in non-financial sector loans of PLN 34.9 billion, the report indicated.
In a high-inflation environment, the growth rate of non-financial sector deposits was significantly lower than CPI inflation. Although deposits for the non-financial sector increased by PLN 283.8 billion in January 2021-June 2023, their real value decreased. The scale of the non-financial sector deposit shortfall in the period January 2021-June 2023 reached over PLN 205.7 billion, according to ZBP.
Source: ZBP and ISBnews
