The Ministry of Finance believes that Poland’s GDP will be better than expected

The decline in Poland’s GDP in 2020 may amount to approx. 3%. – said deputy finance minister Sebastian Skuza. This means that the result can be as much as 1.6 points. percent better than the ministry assumed in the budget amendment after the greatest economic collapse of our country as a result of the coronavirus pandemic. The domestic economy is recovering quickly – great news, although the future is still uncertain.

“The decline in Poland’s GDP at 4.6 percent, forecast by the European Commission, is one of the lowest in the European Union, and the market consensus already indicates an even lower decline of around 3 percent. So I estimate that we have dealt well with the pandemic wave so far “ – Skuza told PAP.

The Ministry of Finance believes that Poland’s GDP will be better than expected

“The decline in our GDP may be lower than forecast and be around 3 percent “ – added.

The deputy finance minister noted that the forecast adopted for the draft budget amendment The decline in GDP in 2020 at the level of 4.6% of GDP is an expression of the ministry’s conservative approach to this issue. “The market consensus seems to be at a better level than ours – which I underline – quite conservative forecasts“- Skuza noted.

The deputy finance minister said that a lower public finance deficit is possible – in relation to the budget envisaged in the amendment, because the lower the GDP decline – the higher the revenues to the state treasury.

However, you have to be careful

Let us recall that in Q2 2020 Poland officially entered the deepest recession since the early 1990s, with a GDP decline of almost 9%. kdk (seasonally adjusted), slightly lower than the EU average.

– Nevertheless, the decline in economic activity during the period of the most severe pandemic restrictions turned out to be smaller than previously estimated, and moreover, it was followed by a surprisingly quick recovery shortly after. Apparently, the most pessimistic scenarios did not materialize, therefore the letters L and U may already be removed from the dictionary of economists describing economic growth trajectories in a pandemic reality – economists from Santander Bank Polska draw the context.

As they explain, it seems that we have finally reached a turning point in which, after several months of continuous downward revisions, the time has come to raise them.

At the same time, Santander specialists emphasize, Forecasting of the future must still be used with caution, and in their opinion excessive optimism is not justified. Why?

– First, part of the initial rebound was due to the fulfillment of delayed demand. Second, government aid programs are running out. After all, the new wave of Covid-19 cases and a delayed response from the labor markets to the shock will soon translate into deteriorating consumer sentiment and consumer demand. All in all, we have revised our economic growth forecasts slightly upwards, mainly due to a better starting point, but we take into account that the pace of economic recovery may slow down in the coming months – they observe.

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