Poland pays for lockdowns with the highest ever public debt
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The actual debt of the Polish sector of the general government is approaching the impassable – according to the constitution – threshold of 60% of gross domestic product (GDP), wrote Polish news portal Newseria.
This is mainly the result of the high financial aid that has been granted to companies in recent months to save them from bankruptcy and to keep jobs.
The pandemic caused the pace of Poland's indebtedness to accelerate sharply, and this results in, among others, high inflation, wrote the portal cited by the Warsaw Business Journal. According to the economist of the Warsaw School of Economics, Dr. Artur Bartoszewicz, we cannot afford further comprehensive lockdowns and they should be used only on a point-by-point basis.
"If we were to deal with another wave of lockdown, the risk related to the deterioration of economic conditions and the risk of bankruptcy of enterprises would, of course, be significant, and the public finance system would be significantly violated. Today we financed the exit from the crisis with debt, and we cannot indefinitely indebtedness," Bartoszewicz said.
The debt is not visible in the state budget itself, but it is published quarterly by the European Commission.
At the end of the first half of 2021, the debt of the public finance sector calculated using the EU methodology amounted to exactly PLN 1,402,042 million. That's 57.4% of Polish GDP.
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