Poland’s GDP in 2020: A decrease of 4.6 percent, an increase of 3.7 percent was planned

Finance Minister Tadeusz Kościński, justifying the draft amendment to the budget for 2020 in the Sejm on Thursday, said that the amendment to this year’s budget is aimed at obtaining money for further stimulation of the economy after the crisis caused by the pandemic.

– The amendment is necessary not only because of the necessary updating of the basic budget and macroeconomic parameters – said Kościński. It has a different task, we want to give the economy a positive impulse by increasing budget expenditure, including capital expenditure, the minister explained. It is about getting money for further stimulation of the economy so that it can return to the growth path as soon as possible – added Kościński.

– We had to provide support to companies, money to fight COVID-19, and protect jobs. Thanks to the spending and measures introduced by the government, the Polish economy felt the economic effects of the coronavirus to a lesser extent than most EU countries. However, it required large financial outlays and that is why we are now amending this year’s budget – said Kościński.

– In the project, the budget expenditure limit increased by PLN 72.7 billion to PLN 508 billion. The revenues are estimated at PLN 398.7 billion, and the assumed deficit will not exceed PLN 109.3 billion – the minister stressed.

He reminded that the draft amendment assumes that the budget revenues will be lower than planned by PLN 36.7 billion, tax revenues will fall by PLN 40.3 billion, but non-tax revenues will be higher by PLN 3.6 billion – he explained.

The Minister of Finance predicts that the decline in GDP throughout 2020 will amount to 4.6%, against the originally assumed increase of 3.7%. In turn, employment in the national economy will fall by 2.4%, and wages will increase by 3.5%, which is slower than in previous years.

– The pandemic caused a sharp slowdown in economic activity and a breakdown of macroeconomic trends. The freezing of the economy in Poland caused a reversal of the long-term trend of improving the situation on the labor market – emphasized Kościński. However, he stressed that thanks to the government’s actions, there was no drastic increase in unemployment. He recalled that thanks to the statutory changes, the government could, inter alia, suspend the stabilizing expenditure rule, thanks to which it could significantly support the economy.

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