From Yahoo Finance: 2025-06-02 09:58:00

Polish stocks and bonds dipped after a nationalist won the presidential election, raising concerns about unraveling Poland’s pro-EU stance and impacting fiscal and monetary policy. Traders find comfort in strong economic growth but are wary of friction between the prime minister and new president exacerbating the budget deficit.

Conservative historian Karol Nawrocki won 50.9% of the vote, beating centrist Rafal Trzaskowski. Analysts warn that Nawrocki’s win could strain relations with the EU, jeopardize crucial funding, and stall judicial reforms. Polish equities fell with banks leading the selloff, highlighting downside risks post-election.

The yield on Polish government bonds rose after the election, with concerns about a possible depreciation of the zloty. Poland’s fiscal deficit, driven by defense spending amid conflict in Ukraine, is a key concern for investors. The election outcome could hinder necessary reforms and lead to an excessively loose fiscal policy.

Outgoing President’s thwarting of Prime Minister Donald Tusk’s agenda may worsen with Nawrocki’s win, potentially leading to a coalition collapse and early elections. The election results could also impact interest rate cuts and bond markets, with policymakers becoming more cautious. The victory is expected to prolong a period of instability in state assets and governance.

State Assets Minister Jakub Jaworowski acknowledges the challenges ahead after Nawrocki’s victory, vowing to focus on improving corporate governance and shareholder value. Analysts foresee potential market volatility and political tension in Poland following the election. Tusk’s coalition may face challenges, and interest rate decisions could be influenced by Central Bank Governor Glapinski’s remarks.

Read more: Revved-Up Polish Assets Dip as Election Erodes Pro-EU Tilt