PM Morawiecki Says Boosting Key Child Benefit Programme Will Cost 0.7%-0.8% Of GDP

Prime Minister Mateusz Morawiecki said at a press conference that increasing monthly pay-outs from the government's key child benefit programme to PLN800 from PLN500 per child will cost around PLN24bn or 0.7%-0.8% of Poland's GDP.

• Morawiecki argued that the proposal will be funded by closing more tax loopholes and increased budget revenues stemming from stronger GDP growth. He noted that "most rating agencies [and] international institutions agree with our forecasts that economic growth will be faster."
• Answering criticisms that loosening fiscal policy might hinder efforts to tackle elevated inflation, the Prime Minister said that the pay-outs will be boosted from next year, when inflation will be in a "strong downtrend."
• Local sell-side analysts warned that the ruling party could announce further rounds of fiscal stimulus ahead of the parliamentary election due in October or November, with pledges unveiled over the weekend amounting to 1% of GDP.