How to Assist the Financial Market

The importance of the sector is declining and, as financiers argue, supporting it would benefit the entire economy

Credits for non-financial enterprises, constituting almost 67 per cent of GDP by the end of 2015, were worth just under 59 per cent by mid-2023. The value of household loans decreased from 36 per cent of GDP to 25 per cent during this period, dropping to pre-global financial crisis levels. The spending of Polish firms and consumers on insurance also decreased from nearly 3 per cent of GDP to 2.5 per cent (the ratio of insurance companies' total assets to GDP also declined). Pension fund assets fell from 7.9 per cent to 7.3 per cent, with occasional increases to over 9 per cent. The market capitalisation of domestic companies listed on the Warsaw Stock Exchange did not exceed 20 per cent by the end of 2022, compared to almost 30 per cent seven years earlier.

These declines signal a gradual reduction in the importance of the financial sector for the economy. This not only affects the ability to expand consumption but, more critically, impedes investment. While in the case of the former, the requirement that we spend only the money we already have does not pose a threat, in relation to expenditure on fixed assets, the slowdown means that we as an economy are losing money.