Economists Optimistic About Poland's Deficit Targets, But Concerned About New Covid Wave

LOCAL NEWS

• Poland's public finance sector deficit could settle at 4-5% of the GDP in 2021, below the 6-7% forecasted by the Finance Ministry, but above the EU's 3% limit.
  • Economist says the deficit reduction plan is to a great extent based on an assumption that the currently observed economic boom continues with nominal GDP estimated at 10% in 2021, but could be derailed by another Covid-29 surge.
• Experts see Covid-19 infections surging in September and continue to discuss possible restrictions with 1,000 cases/day being the break point for tighter restrictions
• Economist warns that over the long run, political disruption, weakened institutions and reduced foreign investment could hold back growth, just as demographic headwinds begin to intensify.
  • Notes, the governing Law & Justice Party, in its push to exert more control over the judicial system, has put EU funding at risk, while efforts to restrict media ownership have set foreign companies on edge – widening domestic divisions.

Data:1300BST

• M3 money supply m/m exp at 0.5% vs 0.2% prior & y/y exp at 8.2% vs 7.4% prior