NBP's Kotecki Says Fiscal Policy Will "Hopefully" Be Closer To Neutral In 2023

NBP's Ludwik Kotecki notes that while monetary policy has done much of the heavy lifting when it comes to fighting inflation, the same cannot be said about fiscal policy.

• Kotecki says that fiscal policy won't likely be restrictive next year, but hopefully it will be "close to neutral," compared to a very expansive budget this year.
• The official notes that the government has seemingly realised that it would be difficult to finance all its spending pledges and will tighten fiscal policy despite 2023 being an election year.
• Kotecki argues that government bond yields have eased off but there is a risk that they could bounce back if the government started to discuss looser fiscal policy, especially ahead of a general election.