COVID-19 to drive Poland’s budget deficit to 21st century-unprecedented PLN100bn

COVID-19 to drive Poland’s budget deficit to 21st century-unprecedented PLN100bn
By bne IntelliNews July 22, 2020

The Polish budget will post a deficit of around PLN100bn (€22.61bn) in 2020 as a result of the government’s effort to ease the impact of the coronavirus (COVID-19) pandemic on the economy, the finance ministry said July 22.

If confirmed – which appears likely – the deficit will be by far the biggest in the 21st century, coming in at more than twice the size of the budget hole of PLN46.16bn in 2016.

The ministry is expected to table this year’s updated budget in the next few weeks, Finance Minister Tadeusz Koscinski told a press conference. The parliament will work on it after the summer recess, in September.

Poland’s debt is also on the rise in the wake of the pandemic. Debt rose 11.7% since the end of last year to nearly PLN1.09 trillion at the end of May, data from the finance ministry showed.

Poland does not count debt issued by the State Development Fund (PFR) and the state bank BGK through which a substantial part of the government’s anti-crisis help is being disbursed. Those two institutions have so far issued over PLN200bn of debt via issuing Treasury-guaranteed bonds that commercial banks and the central bank NBP purchase.

In September, the Law and Justice (PiS) government tabled the first no-deficit budget for 2020, the first such feat in the three decades since 1989. The outbreak of the coronavirus pandemic and the anti-crisis package worth some 13% of the country’s GDP led to major revisions of the budget bill, however.

News

Dismiss