Poland: Government approves EUR 47 billion stimulus package to buttress economy against coronavirus blow
On 30 March, Poland’s Parliament approved a PLN 212 billion (EUR 47 billion) stimulus package, including both wage support and credit guarantees to businesses in an effort to soften the economic impact of the coronavirus outbreak. On the heels of the Central Bank’s 50-basis-point rate cut on 17 March, the relief plan tries to shield the financial and healthcare systems as well as to protect jobs from the impact of coronavirus and the associated containment measures adopted.
The anti-crisis package includes additional investment into the health system; wage subsidies; extra infrastructure spending; cancellation and deferral of several contributions and taxes; loans extension and credit guarantees for businesses. While the whole anti-coronavirus package—including measures to strengthen the financial system and facilitate financing enterprises via lowering the level of reserve requirement for commercial banks—totals PLN 212 billion, additional budget spending amounts to around PLN 75 billion.
Looking ahead, spillovers from coronavirus are set to take a toll on both external demand and the industrial sector through global supply chains disruption. The pandemic will also hit spending decisions, although the stimulus package and solid macro fundamentals should help alleviate its impact. In late March, Fitch Ratings affirmed the country’s A- credit rating with a stable outlook, stating that the Polish economy is likely to be “relatively resilient to the shock from the COVID-19 pandemic compared with many rating peers”.