Page 4 - TURKRptJun22

4 I Companies & Markets bne June 2022
The government is proposing a credit vacation for four months this year and four in 2023, Prime Minister Mateusz Morawiecki told a press conference.
Poland plots relief for borrowers struggling under high interest rates
Wojciech Kosc in Warsaw
Polish mortgage borrowers will gain a temporary credit vacation this year and the next, the government announced on May 10. Banks will also be 'persuaded' to raise savings rates.
The costs of the plan will be covered by the banks themselves, Prime Minister Morawiecki said.
The plan comes in reaction to growing discontent among borrowers, who are forced to pay ever higher mortgage repayments as banks are hiking their margins in line with the National Bank of Poland’s (NBP’s) policy to raise the cost of money to fight inflation.
To relieve borrowers, the government is proposing a credit vacation – meaning no repayments – for four months this year and four in 2023, Prime Minister Mateusz Morawiecki told a press conference.
In line with the proposal, borrowers will be spared repayment expenses for two months in the third quarter and another two in the fourth quarter. Throughout 2023, credit vacations will be spread to cover one month per quarter.
The NBP hiked its reference interest rate eight times in as many months between October and May from the all-time
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low of 0.1% to 5.25%, with more tightening virtually certain, as the central bank says containing rampant inflation is the number one macroeconomic policy now.
Poland’s CPI surged 12.3% y/y in April, an estimate from the statistical office GUS showed on May 1.
But the NBP’s super-hawkish mode has a side effect on millions of borrowers who must endure increasingly higher repayments with every hike of the central bank’s reference rate.
That has the potential to eat into support for the ruling Law and Justice (PiS) around a year before a general election in which PiS will be trying to secure a third consecutive term in office.
“The plan comes in reaction to growing discontent among borrowers, who are forced to pay ever higher mortgage repayments as banks
are hiking their margins”