Should we worry about Poland's widening external deficit?

Poland’s widening current account deficit is not an immediate cause for concern but, with the quality of financing apparently deteriorating and foreign inflows seemingly being used to finance consumer spending rather than a pick-up in investment, it could become an increasing cause for concern among investors over the course of 2011-12. This should slow future zloty appreciation, while the desire to limit speculative capital inflows should mean that interest rate hikes are gradual.