Page 33 - bne Magazine Apri20

bne April 2020 Cover story I 33
CENTRAL EUROPE
Poland
VIRUS UPDATE
• Number of cases as of March 25: 1,031
• Number of deaths as of March 20: 14
• Comment: Poland was slow off the mark, denying the
seriousness of the epidemic amidst concerns about the government’s ability to carry out sufficient tests. The fear is the actual number of cases is much bigger than official estimates. The Law and Justice (PiS) government says it is testing suspected cases only while expanding testing would work towards faster overwhelming of the health care system. Long underfunded and understaffed, the Polish health care system is already coming under severe strain.
PiS also still formally plans to go ahead with the May 10 presidential election despite opposition voicing concern the epidemic will not be under control by that time. Some 30mn Poles are entitled to vote. Incumbent President Andrzej Duda leads the polls. The opposition accuse PiS of not wanting to call a state of emergency officially as that would automatically lead to the postponement of the election.
PUBLIC HEALTH MEASURES
• New tightened restrictions on people’s movement kicked in on March 25. Getting together in groups larger than two is banned unless by families. Going out is virtually banned except absolutely necessary or to work. After some initial confusion as to the scope of the restrictions, recreational walks or activities like jogging or cycling were eventually allowed. Most retail is closed except for grocery stores and essential service points. There are no international flights in and out of Poland and international train service is also on hold. Poland maintains checks along all of its borders. Foreign nationals are not allowed in the country while returning Poles must go into two-week quarantine. The government also increased fines for breaching quarantine rules to up to PLN30,000 (€6,560), or six times the average gross wage.
ECONOMIC MEASURES
• The PiS-controlled lower house of the parliament, the Sejm, is about to debate a PLN212bn stimulus and relief package to battle the effects of the epidemic as well as maintain liquidity of companies and reduce unemployment.
• The package is still being fine-tuned, the government says. Its basics include:
• Capital increase or bond financing for medium and
large companies
• State bank BGK subsidizing interest on loans
• Refinancing lease contracts for transport companies,
one of the hardest hit sectors
• Nearly half of salaries and social insurance premiums
covered by the state for companies in downtime • Parents looking after children up to the age of 8
entitled to care allowance
• Employees on civil law work contracts to benefit from
a monthly allowance of about PLN2,000 gross
• State to cover 40% of payroll in companies in financial
trouble
• Postponement of social insurance contributions
without fees and interest for small companies and the
self-employed
• Extension of deadline for forwarding income tax
advances
The Sejm is expected to debate and vote the package this week, with it coming into effect on April 1, according to the government’s plan.
ECONOMIC FORECASTS (where available)
• Most forecasts are for GDP growth to ease to below
2% in 2020 with some predicting zero growth (ING) or recession (Morgan Stanley). An outlier forecast of growth of 3% comes from Moody’s.
• Unemployment rate expected to increase from 5.5% in early 2020 to anywhere between 6.5% and 10% towards the end of the year.
• General government deficit to increase to around 6%-7% this year, according to Credit Agricole.
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