Poland amends budget to include COVID-caused deficit

WARSAW, Poland (AP) — Poland’s lawmakers have amended this year’s budget bill to include a deficit equal to $29 billion due to the national lockdown and the cost of financially supporting companies hit by COVID-19 safety measures.

The lower house of parliament voted late Wednesday 232-218 with one abstention to approve the amended 2020 state budget with a deficit of up to 109.3 billion zlotys.

Before the pandemic, Poland’s government was planning a balanced budget for the first time in more than 30 years of democracy. But the unexpected economic slowdown and spending for the fight against the coronavirus pandemic, coupled with generous social policies, upended those plans.

The amended budget bill allows for up to 508 billion zlotys ($133 billion) of spending, or 72.7 billion zlotys more than planned before the pandemic. It foresees income of 398.7 billion zlotys ($104 billion), or 36.7 billion zlotys less than planned earlier.

The economy is expected to contract 4.6% this year but the government said last month that economic data suggests the drop will be closer to 3.5%. Before the pandemic, Poland’s economy was expected to grow 3.7%.

The government plans to continue its popular program of bonuses for families with children.

Finance Minister Tadeusz Koscinski said in parliament late Wednesday that the budget also includes means for stimulating the economy.

The government has also proposed a draft budget for 2021 that allows for a deficit of up to 82.3 billion zlotys ($21 billion) and estimates GDP will grow by 4%.

Prime Minister Mateusz Morawiecki said the proposed 2021 budget is a “rational compromise between the possibilities and the aspirations of Poland and the Poles” and that the central point is the “security of our families.”

The draft is being debated in parliament.

A significant part of the budget’s income would come from European Union coffers, leading the Polish government to reject suggestions made by the EU that the level of the payout should depend on a nation’s record for the rule of law. The EU is critical of Poland’s current rule of law standards.

The bills need approval from the Senate and President Andrzej Duda.

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