Poland announces stimulus package as the virus outbreak worsens

20 March 2020 (Last Updated March 20th, 2020 16:30)
Poland announces stimulus package as the virus outbreak worsens

Poland has become the latest country in Europe to announce fiscal stimulus measures to offset the disruption to economic activity caused by the widespread outbreak of the coronavirus.

The Polish Government has announced an emergency fiscal stimulus plan to shield businesses and workers from the fallout of the epidemic. The Polish Government expects that the virus will severely impact the economy, and in response have announced a stimulus package worth PLN212bn ($52bn), which is equivalent to 9% of GDP.

The measures include loan guarantees for businesses, covering up to 40% of salaries for employees who are unable to work and allowing companies to delay their social security contributions. The Polish central bank has also cut its benchmark interest 50 basis points and announced liquidity measures to help businesses.

Poland has thus far reported 355 confirmed cases and five deaths as a result of the virus outbreak. The government has announced quarantine measures to slow the spread of the virus, which includes closing its land border with neighbouring countries and closing restaurants, cinemas and cafes across the country.

The quarantine measures are likely to lead to severe disruption for the construction industry in Poland. Construction projects are expected to be halted temporarily in Poland while the lockdown is in place. GlobalData forecasts that the Polish construction industry will grow by 3.8% in 2020, this is dependent on the virus being contained by mid-2020. However, if the situation deteriorates in the coming months, a downward revision to the forecast is likely.