The government ceased to pretend that it has the economy under control. The head of the Polish Fund for Development said that he expects a recession of over 10 per cent followed by a long recovery.
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Up to now the government’s official statements were filled with optimism and argued that Poland is perfectly prepared. PM Mateusz Morawiecki repeated that claim numerous times and Poland’s central bank governor Adam Glapiński argued with a soft smile when the ’anti-crisis shield’ was presented, that we have ‘endless amounts of cash’.

Glapiński also rejected the possibility that the economy would contract. He said: “The most pessimistic outcomes of our modelling show no less than 1.6-1.7 of expected growth in 2020”. But added that ‘one might expect’ the economy to grow by 2 per cent.

 He argued: “This crisis is completely different than the previous one or any other. Once we will have the disease contained, the economy will spring back in terms of demand and investment”.

Banks expect steep recession

 Now we know, that it was all a fairy-tale. The governor’s claims were ignored by the financial sector where analysts were creating one grim prediction after the other. The first was mBank, cutting its expected GDP change for 2020 from 1.6 per cent expansion to 0.3 contraction. That would mean a recession of over 2 per cent in the second quarter, with 4 per cent figure as the worst-case scenario.

Even lower are the forecasts from Credit Agricole. The bank expects a contraction of 2.1 per cent this year.

City Handlowy bank is another to hold a pessimistic view. Its forecast for 2020 shows a recession of 3.2 per cent and a two-digit figure in unemployment. That would mean a year-to-year contraction of about 8 per cent in the second quarter of 2020. City Handlowy chief economist Piotr Kalisz named it ‘a scenario of moderate optimism’.

But banks’ forecasts turn out to be by far more colourful when compared against the government’s agency expectations.

‘No sedation’ from the PFR

Paweł Borys chairs the Polish Fund for Development and is one of the government’s key figures in tackling the economic fallout of the pandemic.

He revealed a gruesome forecast, as in his opinion Poland’s economy might crash in an unprecedented way with the GDP contracting by 5-10 per cent in the second quarter of the year.

 In an article for the Business Insider he wrote: “The economic and social cost of the covid-19 pandemic will be gigantic. Taking the scale of the global crisis under consideration one could expect the economy to enter a period of deep, 5-10 per cent recession.”

The article also claims that even with the outbreak contained the economy will not come back quickly:

 He wrote: “The scenario under which the disease ceases to spread in the second quarter assumes that the economy will stabilise by the third quarter and start to grow by late 2020 to early 2021. Chances of a V-shaped spring back are lowering and the U-shaped scenario seems more plausible. It appears that at least until the vaccine is developed the reality will be completely different”.

Mr Borys also sees the global economy to be severely damaged by the outbreak.

He wrote: “Forecasts expect the GDP in the US and in Europe to fall by 10-15 per cent in the upcoming quarter and their economies to contract by 8-10 per cent in 2020. The demand, investment and international figures will plummet as unemployment rates will soar”.

Up to now, it is the widest and most genuine statement we’ve heard from the policymakers. Prime Minister Mateusz Morawiecki limited himself to saying that the worst-case scenario is a U-shaped short recession followed by a spring back of the Polish economy.

Every day, 400 journalists at Gazeta Wyborcza write verified, fact-checked stories about the coronovirus pandemic for you.

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