Parliamentary elections 2023. Goldman Sachs analysis

“A potential Civic-Left-Third Way government coalition would likely seek to repair relations with the European Union relatively quickly, which would mean trying to unblock approximately EUR 36 billion from the EU Recovery Fund, which has been suspended over concerns about the independence of the judiciary, as well as lower risk that EU transfers (worth 2-3% of Polish GDP) will be suspended or cut in the future,” Goldman Sachs wrote in the report.

“In addition, it would mean further isolation and weakening of the Hungarian government’s position in the EU, as Prime Minister Victor Orban has previously cooperated with PiS in seeking to limit EU influence, as well as a more cooperative general consensus in the EU and a potential shift of internal power to the east,” it added.

Goldman Sachs economists note that the fiscal deficit is likely to remain high as both the government and opposition parties made significant spending commitments during the campaign.

In the case of monetary policy, economists expect a more hawkish NBP reaction function in the short term, although with inflation still falling, they expect further reductions in interest rates in 2024.

“We expect that the short-term reaction function of the NBP will become more hawkish, because the voice of President Glapiński was previously much more hawkish during the government of the Civic Platform. Nevertheless, with rapidly falling inflation, we still expect significant reductions in interest rates in 2024,” it wrote. report.

According to the official results of the parliamentary elections, Law and Justice obtained 35.38 percent. votes, Civic Coalition – 30.70 percent, Third Way – 14.40 percent, New Left – 8.61 percent, and Confederation – 7.16 percent. This means that PiS won 194 seats in the Sejm elections, KO – 157; Third Road – 65, New Left – 26, and Confederation – 18.

SEE ALSO: Election results 2023. Who won the parliamentary elections to the Sejm and Senate