Anti-inflation shield to curb rising prices, PM says

Mateusz Morawiecki/Facebook

A PLN-10 billion (EUR 2.1 billion) financial shield will deliver the government's “reply” to rising inflation, the Polish prime minister said on Friday in a podcast.

Mateusz Morawiecki said record-high inflation has not only hit Poland, but also several major economies, including Germany and the US.

He added that the high inflation figures were caused by the Covid-19 pandemic, rising oil and gas prices, and the EU's and Germany's allegedly poor decisions on the German-Russian Nord Stream 2 gas pipeline.

"The whole world today is under the threat of inflation," Morawiecki said.

On Thursday, the government announced its anti-inflation 'shield,' which it says, through a series of tax cuts, will mitigate the effects of inflation.

"This shield is our reply to rising inflation," said Morawiecki about the package, which will be introduced in December and January.

Listing details of it on Friday, Morawiecki said it will cut fuel excise down to the lowest level in the EU for five months starting from December 20.

The shield will also include a three-month VAT cut on heating gas from 23 to 8 percent, and a three-month VAT cut on electricity from 23 to 5 percent, and scrap all excise duty on electricity.

The prime minister also announced an inflation aid scheme for families, who will be offered financial aid to compensate for rising consumer prices, especially food.

Morawiecki said the government will limit its public administration budget for as long as inflation remains high.