The main objective of the amendment to the budget act for 2020 is to provide funds for further stimulation of the Polish economy so that it can return to the growth path as soon as possible – said Minister of Finance Tadeusz Kościński in the Sejm. The deficit at the end of this year is expected to amount to approximately PLN 109 billion.
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The government bill to amend the Budget Act for 2020 was referred to the Parliamentary Public Finance Committee. 450 deputies took part in the vote, 222 were against the bill in the first reading and 228 against.
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Earlier, the Sejm held a debate accompanying the first reading of the draft novel.
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– The budget for 2020 was to be the first balanced budget in 30 years, i.e. one in which all expenses from the budget were to be financed with its revenues – reminded Minister of Finance Tadeusz Kościński. – Unfortunately, the unprecedented event of the COVID-19 pandemic led to one of the greatest economic crises in recent years. Its effects spilled over the whole world and also affected Poland, he added.
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According to the head of the Ministry of Finance, the amendment is necessary not only because of the necessary update of the basic budget and macroeconomic parameters. As he explained, it has a different task. “We want to give the economy a positive impulse by increasing budget expenditure, including capital expenditure,” said Kościński. – The main goal of the presented amendment to the budget act for 2020 is to provide funds for further stimulation of the Polish economy so that it can return to the growth path as soon as possible – he added
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– We had to provide support to companies, funds 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 European Union countries. However, it required large financial outlays and that is why we are now amending this year’s budget, said the Minister of Finance.
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Coronavirus and the economy
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 noted.
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Tadeusz Kościński recalled 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.
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The finance minister indicated that the GDP is now expected to decline by 4.6 percent throughout 2020, compared with the originally assumed increase of 3.7 percent. In turn, employment in the national economy will fall by 2.4 percent, and wages will increase by 3.5 percent, which is slower than in previous years.
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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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photo-source">Main photo source: PAP / Wojciech Olkuśnik
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