Public finance in good condition despite pandemic - FinMin

Wojciech Olkuśnik/PAP

Despite huge government support for the Polish economy during the coronavirus crisis, Polish public finance is in a good condition and the recession in the country has been one of the mildest in Europe, the finance minister said on Tuesday.

"Despite sizeable fiscal support for the Polish economy, Polish public finance remains in a good condition," Tadeusz Koscinski told PAP.

"The increase in debt as a result of anti-crisis activities will be close to the EU average. According to European Commission's forecasts, next year Poland will be among the top ten EU countries with the lowest general government deficit," Koscinski said, adding that Poland's public debt-to-GDP ratio is much lower than the EU average.

"Our recession will be among the shallowest in Europe. Thanks to this, the crisis caused by the pandemic will move our GDP, according to forecasts, only by seven quarters back. For comparison, Germany's economy may move back even to the middle of the past decade," the minister said.

"It is not true that Polish public finance was in a bad shape before the pandemic. The debt-to-GDP ratio decreased by 8.3 percentage points between 2016 and 2019. We have a very good debt structure, as recently observed by S&P (global ratings agency - PAP)," Koscinski said.

The minister said that less than a fourth of Polish debt is now denominated in foreign currencies and the relation has improved by more than a dozen percentage points in recent years.

In the draft budget law for 2021, the government is planning a deficit at 6 percent of the GDP, while the general government debt is to reach 64.7 percent of the GDP.