Rates council sees GDP growth at 3.7 pct, CPI at 3.5 pct in 2020

Poland's economy will grow by 3.7 percent and inflation should be capped at 3.5 percent in 2020, the Monetary Policy Council (RPP) wrote in a comment on the draft budget law for 2020, which assumes GDP growth at 3.7 pct and CPI at 2.5 pct.

According to RPP, the budget bill is based on realistic assumptions regarding economic growth but inflation may exceed the government's expectations. "The fiscal policy will contribute to higher GDP growth in 2020, reducing the scale of the expected economic slowdown. At the same time, it will contribute to higher inflation in 2020," the rates body wrote.

The fiscal policy adopted by the government will also be favourable for reducing Poland's public debt, RPP wrote.

Despite a lower GDP growth compared to 2019, the macroeconomic situation will still be favourable for public finance, mainly due to growing wages and household consumption.

RPP said the government's target of a 6.0 percent growth in tax collection is realistic.

The government's welfare handouts, including the landmark monthly child bonus 500 Plus and an annual bonus pension payment will support GDP growth in 2020, but will also add to inflation, RPP said.