Polish Officials Signal More Targeted Approach To Fiscal Spending

Speaking at an event hosted by the Federation of Polish Enterpreneurs, Finance Minister Rzeczkowska called for more "targeted and temporary" relief measures during the unfolding crisis, contrasting them with steps taken during the COVID-19 pandemic.

• Rzeczkowska noted that the government will seek to reduce the cost of relief measure to the state budget by seeking alternative sources of funding, which may include windfall revenue of gas and energy companies and additional sales of CO2 emission permits under the ETS framework.
• Earlier this morning, Prime Minister Morawiecki said that the government will "probably" impose an income threshold on the planned natural gas subsidies. The decision will be taken within the next few days.
• Comments from Rzeczkowska and Morawiecki are seen as further evidence of the government's pivot towards spending cuts. Polish government bond yields keep retracing their earlier advance and last sit +4.0bp to -0.4bp across the curve, with 10-year yield hovering near its three-month lows.