2020 Draft Budget Assumes 1% Interest Rates, PiS Seek to Push Back Local Elections

LOCAL NEWS

• Finance ministry assumes in its draft budget bill for 2022 that the central bank NBP will hike the country's interest rate to 1% from the current 0.1%, assuming the absence of serious disturbances to the economy cause by Covid-19. Also expects growth of 4.3% in 2021, well above the central bank's target of 2.5%
• Poland's non-state budget debt will swell to over PLN 350 bln in 2022, or ca. 13% of GDP and nearly a quarter of Poland's overall debt, chiefly on impact of the country's Covid relief programs.
  • Economists say The eventual non-state budget spending may prove higher than currently assumed, translating into higher public finance sector deficit and continued high Covid bond issuance by state bank BGK
• PiS will seek to push back the next local elections to spring 2024 from autumn 2023, so that they take place after the next general election.
  • The goal would be to prevent the opposition from scoring any bonus points in the general election from a prospective good result in the local election
• Poland plans no major tax system tightening measures in 2022 and expects fine tuning of VAT to generate PLN 3 bln in additional revenues, a review of the 2022 tax bill shows
• Poland's long-term foreign currency debt rating was affirmed by Fitch at A-, outlook remains stable and upgraded the Short-Term Foreign Currency (STFC) IDR to 'F1' from 'F2'