The government finally got down to what had been fiction for five months. Despite the economy shutting down for several weeks, a balanced budget was still in place, with the Polish economy growing, unemployment falling and wages rising at a relatively high pace.
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In sequence. First, the state of state finances. Six months ago, the government was convinced that it would manage to implement the most ambitious budget in the recent history of Poland. Income at the level of PLN 435 billion and the same amount of expenses. And most of all, no deficit, which has not happened in our country yet.
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Watch: Recession and Record Deficit. “The government has to go into debt, the banks have to print money”
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So many announcements. Already in March it was known that they can be thrown into the trash. Today we know that the state budget will not receive PLN 435.3 billion, but only PLN 398.7 billion. This is the result of, for example, exemptions from the Social Insurance Institution, but above all, the reduced economic activity of Poles in March and April. Consequently – much lower tax revenues.
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On the other hand, the expenses did not decrease at all. Instead of PLN 435.3 billion, the budget will have to spend exactly PLN 508 billion. And this is not counting, for example, the PFR financial shield or the COVID-19 counteracting fund. They were accounted for “extended” beyond the budget and constitute the debt of the so-called general government sector.
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Lower income and higher expenses. Effect? It is not hard to predict. Instead of a balanced state budget, we have a gigantic budget hole. 109 billion zlotys is an amount that we have not even come close to in the last 30 years.
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Is it really a lot? For comparison, the ten richest Poles from the last Forbes ranking gathered a total of just over PLN 75 billion.
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The National Stadium can also be built for PLN 109 billion in each of the provincial cities. And those “old” ones, when there were still 49 of them in Poland. It would also be enough to bring the Brazilian footballer Neymar (the amount of his transfer to PSG is about EUR 222 million) to each club of Ekstraklasa, I, II and III league. So roughly 100 teams, one Neymar for each.
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And since we’re already at football, Robert Lewandowski would have to work for this amount for … 1000 (thousand!) Years. And a statistical Pole? We already count in millions of years here.
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GDP down, unemployment up
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Six months ago, the government assumed that the value of the Polish economy would grow by 3.7%, i.e. by nearly PLN 150 billion. As a result of the pandemic, our GDP will shrink by almost PLN 200 billion, i.e. by 4.6%.
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However, if this does not appeal to human consciousness, it will certainly be said by the fact that the epidemic also cost us several hundred thousand jobs.
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At the end of 2019, the rulers hoped that the current year could be closed with unemployment at the level of 5.1%. It’s roughly 850,000. people out of work. Now it turns out that this number could increase by about 500,000. In the amended budget, the government assumes that in December there will be approximately 1.3 million Poles unemployed.
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Those who will not lose their jobs cannot count on significant pay rises either. While recently salaries were to grow at a rate of 6 percent. per year, so now the pace will drop by half. Private sector workers will feel it much more. There, the average annual increases will not be 6.3 but only 3 percent.
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So no more penny will come into the wallet, but much more will flow out of it. Prices are to increase by 3.3 percent this year, and not – as before the epidemic – by 2.5 percent. These, in turn, are government estimates of inflation.
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All the above-mentioned indicators are only forecasts. As prof. Ryszard Bugaj, currently the uncertainty is too great to clearly estimate the impact of the coronavirus on the Polish economy. In 3 months it may turn out that it was even worse. Or that fear had big eyes and the results will still be better than anticipated.
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yesterday (18:15)
pollThat much, i.e. over PLN 100 billion, was distributed in the form of pluses, and you can see everything on credit, i.e. a deficit. The Polish state behaved like the young … Read the whole thing
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yesterday (18:15)
reader5 years of great prosperity and an even bigger MINUS 250 BILLION. This is the so-called miracle rule …
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yesterday (20:20)
betkaMorawiecki’s quick decisions and the anti-crisis shield saved us from the gigantic pit. These are the facts.
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