Poland amends 2020 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 resulting from the national lockdown and the cost of financially supporting companies hit by anti-COVID-19 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, leading to one of the highest deficits in decades.

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.

In the bill, 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 program of bonuses for families with children, a plan that had proved popular.

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%.

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

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