New legislation to extend 'anti-inflation shield'

Piotr Nowak/PAP

The Sejm, Poland’s lower house of parliament, has passed legislation that will extend the so-called anti-inflation shield to October 31 as well as introduce "credit vacations."

At the end of 2021, the government rolled out its first "anti-inflation shield" to combat Poland's rising inflation rate. It included a VAT cut on food products to zero percent from the standard 5-percent rate, while VAT on fuels went down to 8 percent from the standard level of 23 percent.

The current anti-inflation shield was to last until the end of July, but the Sejm decided to prolong it until October 31.

In May 2022, the prices of consumer goods and services (Consumer Price Index, CPI) increased by 13.9 percent year on year, and by 1.7 percent month on month, according to the Central Statistical Office (GUS).

The Sejm also passed an act on assistance to borrowers which contains regulations concerning support for borrowers, such as the possibility to take advantage of payment holidays for those who have debts in zlotys. They will be able to apply for four months of credit holidays still this year.

The legislation also includes provisions aimed at strengthening the Borrowers Support Fund, which helps borrowers who are experiencing financial difficulties. According to the draft, the banks are to pay an additional PLN 1.4 billion (EUR 304 million) into this fund by the end of the year.