“Raising the 500+ flagship child-benefit programme to 800+ should raise Poland’s economic growth prospects by 0.5 percentage points next year.”, assessed the president of the Polish Development Fund, Paweł Borys. He added that this would not change trends related to inflation.
“We are continuing and developing the social sphere,” said Jaroslaw Kaczynski, the head of Poland’s ruling party, during a speech at the end of a Law and Justice party convention in Warsaw. “From the new year, 500+ will be a name still remembered, but the amount will be different – 800+.”
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“Forecasts from some economists suggest that when it comes to inflation, it may alter the inflation dynamics by 0.2-0.3 percent. However, this does not change the overall trend and should not have a significant impact – at the scale, we are discussing today, which is about expenditures of 25-30 billion PLN – it should not affect monetary policy,” added Borys.
According to the President of the Polish Development Fund (PFR), the increase in the 500+ benefit will not change the inflation-related trends.
“These increases in the 500+ benefit come at a time when we have an economic slowdown. The economy is expected to grow by around 1 percent this year, and forecasts indicate 2.5 percent for next year. As long as the economy develops below the so-called potential GDP growth, which stands at 3.5 percent for Poland, such fiscal stimulus should not generate additional price pressure,” stated Paweł Borys.
He assessed that the Monetary Policy Council should not rush with interest rate cuts, and the process of returning to low inflation will take at least two years.
“It seems certain this year, especially given the current strengthening of the zloty, that inflation will fall below 10 percent in the fourth quarter. It should decrease below 5 percent next year,” he added.
According to the President of the Polish Development Fund, the government may extend the freeze on electricity prices for households until next year, although the scale of subsidies related to the energy crisis should already significantly decrease.
“Fortunately, gas and coal prices are falling worldwide, and electricity prices are also dropping. Therefore, we have a chance that we won’t need to spend as much to keep them at a low level. Even with maintaining this freeze, the scale of these expenditures will be smaller,” observed Borys.
Electricity prices for households in 2023 have been frozen at the level from January 2022. Regulations guarantee a fixed electricity price for annual consumption: 2000 kWh for households; 2600 kWh for people with disabilities; 3000 kWh for families with the Large Family Card and agricultural households.
Today, Eurostat released the May edition of the interactive European Statistical Recovery Dashboard.