The Bank enters 2022 well prepared to benefit from market opportunities as well as to absorb any risks that may materialise. After a period of mergers and transformation, the time has come for clear organic growth, as already demonstrated by the 2021 results. The Bank expects this path to continue and even strengthen this year and beyond. Despite the global pandemic and the write-downs related to franking credits, the capital and liquidity position remains strong and allows us to look to the future with optimism, focusing on business development.
Russia’s invasion of Ukraine on 24th February 2022 is the most important factor that will shape the domestic and global economic situation. It is currently impossible to estimate the impact of the war in Ukraine on prices and economic growth and the behavior of domestic and foreign financial markets. The impact will depend on how long the war will last, what the political solution to the conflict will be, what additional sanctions will be imposed on Russia and what Russia’s response to them will be. However, it can be expected that the war in Ukraine will weaken the rate of economic growth and increase inflation compared to scenarios assumed before the outbreak of the war. We should also assume an increase in state expenditure on defence and humanitarian aid for refugees from Ukraine, and consequently an increase in the deficit of the public finance sector. What remains unknown is the reaction of the central bank and monetary policy this year and next year, which will depend on the combination of economic growth, inflation and the PLN exchange rate.