Poland Pledges Stimulus Worth 9%/GDP to Combat Virus Fallout

(Bloomberg) --

Poland announced a rescue package designed to shield the economy from the impact of the coronavirus that will cost around 212 billion zloty ($52 billion), or roughly 9% of gross domestic product.

The plan to support entrepreneurs and protect the labor market envisages holidays in debt repayments and social contributions, loan guarantees as well as payments of salaries to those unable to work, President Andrzej Duda and Prime Minister Mateusz Morawiecki said at a joint conference in Warsaw on Wednesday.

“We want to get through the next few, critical months intact,” Morawiecki said. “This is a shield that is to give hope that things will get better soon.”

The stimulus package, which will be fast-tracked through parliament, follows this week’s emergency interest-rate cut and includes a 70 billion zloty liquidity injection from the central bank. Poland’s battered stocks climbed and the zloty currency weakened 0.4% against the euro following the announcement.

In a bid to slow the spread of the virus, the government has shut borders and shopping centers, bars and restaurants. The restrictions may push Poland into its deepest recession since the early 1990s, according to Morgan Stanley.

Key measures of the plan include:

• Holidays for social security contribution payments
• Guarantees worth up to 80% of loan value for companies
• Gas, power bill payment holidays for some clients
• Creating a 30 billion zloty infrastructure investment fund
• State payments, covering 40% of salaries, for companies that will be impacted by drops in sales, losses
• Temporary suspension of Sunday trade ban
• State agency will seek to take over payments of leasing from transport companies

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