The risks are increasing that policy will be stuck until the presidential election of 2025. We may witness frequent no-confidence votes against the government and so on. The electorate may get frustrated from waiting for new policies. Hence, a return to power of opposition PiS always remains a possibility. New PM Donald Tusk scored a symbolic victory when the EU unlocked some frozen funds after his election. But, such easy wins are unlikely, going forward.

This heightened political risk does not seem to be priced into the Zloty’s valuation, because of which we see the Zloty depreciating gradually over 2024-25.