Latest News

and Reports

Economic and Policy Response to Coronavirus

IMF Update on Policy Actions in Poland

The following information is copied straight from the IMF for your convenience. Also, find it here: https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#P

Background. Poland reported its first confirmed COVID-19 case on March 4, 2020. A second wave firmly established itself in October 2020, surpassing the first wave by a large margin. While new infections moderated visibly in late November/January, they started to grow strongly again in late February 2021, with a third wave evident in March in which new cases have outpaced the second wave.

In March 2020, the government first introduced containment measures, including closures of schools, universities, restaurants, and all non-essential retail trade and service outlets, as well as bans on large gatherings, border controls, and travel restrictions. Following a quarter-on-quarter (q/q) contraction of 0.3 percent in Q1 2020, GDP contracted a further 9.0 percent q/q in Q2, led by declines in private consumption and fixed investment. Following an easing of restrictions, the economy expanded 7.9 percent (q/q) in Q3 driven primarily by private consumption, and output reached a level only 2 percent below the pre-crisis peak. In the context of the second wave, the economy contracted 0.7 percent (q/q) in Q4. Annual GDP declined 2.7 percent in 2020, indicating the first recession since 1991.

Reopening of the economy and additional containment measures. On April 16, 2020, the government outlined a four-stage plan to reopen the economy. Starting on April 20, a larger number of people was allowed in shops and at religious gatherings, and public parks and forests were reopened. The second phase of the lockdown easing plan was launched on May 4 with the reopening of hotels and shopping malls (with limitations on the number of persons), the opening of daycares and pre-schools (as of May 6), as well as softening quarantine rules for cross-border workers and students. The third phase was launched on May 18, entailing the reopening of restaurants, hairdressers, and cosmetic salons, and permission for outdoor sports events with up to 50 persons with no audience. Grades 1-3 in primary schools opened on May 25 with strict sanitary rules, with a maximum number of children allowed in class. The fourth stage started on May 30, with the opening of cinemas, playgrounds, and gyms, all with stricter sanitary regimes than normal. Outdoor events are allowed with up to 150 people, with social distancing or face masks. Internal EU borders were opened on June 13, in line with EU recommendations.

In response to the second wave of the pandemic, the authorities initially tightened restrictions on a regional basis, grouping counties into “yellow” and “red” zones based on the local severity of the outbreak. By October 24, the entire country had been placed in a “red” zone. Following a further acceleration of cases, additional restrictions were announced on November 4 (in effect from November 6 to December 27). The restrictions included tighter limits in smaller retail stores. Hotels were opened only for business travel. Restaurants were open for takeout/delivery only, remote learning was implemented for children at all grades, social gatherings of over 5 people were banned, wedding receptions were not permitted, religious service attendance faced limits, and public transport was limited to 50 percent of seats. Water parks, swimming pools, and gyms were closed. Cultural services were closed, including cinemas and museums. Shopping malls were closed between November 6 to November 28, and reopened after, with a limit on capacity. The government restricted Christmas meetings to five persons and imposed mobility restrictions on New Year’s Eve. The authorities subsequently announced a national quarantine from December 28 to January 18, including the shutdown of hotels, ski resorts, and shopping malls with limited exceptions. Persons entering Poland using public transport were put under 10-day quarantine. The dates coincided with the winter school break, which was shifted to early 2021 for all regions, implying a one-month shutdown of schools, starting from the Christmas break on December 23. On January 12, the government extended restrictions to January 31, with the exception that primary schools were re-opened for grades 1-3. On January 29 government announced the re-opening of shopping malls and cultural institutions in sanitary regime from February 1. Further restrictions were lifted on February 12, with opening of theatres, cinemas and operas up to 50 percent of audience. Hotels and accomodation facilities were opened, providing no more than 50 percent of guests and only room-service meals. The government also allowed opening of such sport facilities, as ski slopes, tennis courts, skating rinks, stadia, and swimming pools.

In response to rising infections, these restrictions, as well as closing of shopping malls and moving schools back to remote mode, were re-introduced on February 27 in the region with worst pandemic situation, Warminsko-Mazurskie voivod. Moreover, the government tightened requirements on face covers (no scarfs or plastic semi-helmets allowed) and imposed quarantine for all persons entering Poland from Czech and Slovak Republic, unless they have a negative test result no older than 48 hours or were vaccinated with two doses.

With infections increasing during the third wave, the government expanded restrictions to three regions (Pomorskie, Mazowieckie, and Lubuskie voivods) on March 13-15, and then on March 25 announced new country-wide restrictions taking effect on March 27 lasting until at least April 9. In addition to provisions stipulated by regionally tighter sanitary regimes, the new restrictions include the closure of nurseries, kindergartens, hairdressers and beauty services, and large furniture and hardware stores. Occupancy limits were tightened in retail stores and churches. An obligatory 10-day qurantine requirement was imposed on all persons arriving from abroad as of March 30, except those coming from the Schengen area with negative test result not older than 48 hours, vaccinated against Covid-19 with vaccines allowed by the European Medicines Agency, or tested negative after arrival to Poland. The quarantine requirement does not apply to transport workers (e.g., truck drivers) and students.

The SARS-CoV-2vaccination program was launched on December 27 with medical staff being the top priority group. The National Vaccination Strategy aims for all 31 million adult Poles to be vaccinated by no later than early 2023, though if the five vaccines to be chosen are made more quickly this could be sped up to mid-2022. By April 1, total vaccinations reached 6.3 million, with 11 percent of the population having received a first shot and 5 percent of the population having received both shots.


Key Policy Responses as of April 1, 2021



The fiscal policy response to the first wave of the pandemic was sizeable, estimated at PLN 116 billion (5.2 percent of GDP). New credit guarantees and micro-loans for entrepreneurs estimated at PLN 74 billion (3.3 percent of GDP) were also approved. Additionally, the Polish Development Fund has financed a PLN 100 billion (4.5 percent of GDP) liquidity program for businesses. Most of the measures have expired by now, except for the PFR liquidity loan program for large firms. Key measures include:

  • Additional funds for hospital equipment and supplies;

  • Wage subsidies for employees of affected businesses and self-employed persons. Businesses, regardless of their size, may apply for a three-month subsidy in the event of work stoppages or reduced working time. This subsidy covers social insurance contributions, and it ranges from 50 to 90 percent of the minimum wage for each employee, depending on recorded decrease in turnover in 2020. The subsidy includes furloughed employees.

  • Increased guarantees from the national development bank (BGK) for enterprises. A new Liquidity Guarantee Fund in BGK will be established offering guarantees for loans taken by medium and large companies;

  • Additional loans for micro-firms;

  • Postponement or cancellation of social insurance contributions. For micro firms with up to 9 employees social insurance contributions are covered by the budget for 3 months. For companies employing from 10 to 49 employees, 50 percent of social insurance contributions is paid by the budget. Possible deferral, payment in installments, or cancellation of taxes. The self-employed and employees working on civil law contracts can receive a one-time benefit.

  • Deduction of this year’s losses for 2021 tax settlement (tax returns for 2019 might be corrected in order to deduct the losses of 2020 from the 2019 income);

  • An allowance for parents of young children related to school closures;

  • A “solidarity benefit” for those who lost jobs after March 15, paid for three months (June-August);

  • An increase in the unemployment benefit by 39 percent during the first 90 days of unemployment;

  • To support the local tourism industry and families with children, a tourism voucher has been introduced, providing each child entitled to Family 500+ benefits with a one-time PLN 500 voucher to be spent at hotels or tourist events in Poland.

  • Establishment of a new fund (COVID Fund) dedicated to combat the negative impact of the pandemic with the balance sheet size of PLN 100 bn (revenues and expenditures at PLN 100 bn). The Fund is supervised by the Prime Minister but flows from the fund will be transferred to various ministers and other institutions involved in combating negative consequences of pandemic. Revenues are raised through the issuance of bonds by BGK (bonds are guaranteed by the State Treasury).

  • Financial support of the investment tasks managed by local governments (under new government resolution up to PLN 12 bn will be dedicated to strengthening investments processes in local governments as a Governmental Fund for Local Investments). The support will be transferred to projects worth at least PLN 400000. The aim of new mechanism is to revive public investment in local government subsector. Financing will be ensured by the COVID Fund and as a result its balance sheet might be extended by additional PLN 12 bn (on the revenue and expenditure side). The local government could spend these funds until end of 2022.

  • Interest rate subsidies for bank loans granted to provide financial liquidity to entrepreneurs affected by the COVID-19. The new fund in BGK was established (Subsidy Fund) with the purpose to support companies affected by pandemic through paying subsidies to lower their interest rate payments on turnover loans granted by banks. Fiscal cost of new mechanism for 2020 budget will be up to PLN 0.3 bn.

  • The Polish Development Fund is providing liquidity loans and subsidies for micro, small/medium, and large enterprises. The total value of the program equals PLN 100 billion. Up to 70 percent of the financing may be non-returnable, upon fulfilling the relevant conditions related to maintaining employment, continuing business activity, and the level of lost sales.

  • Foreign workers permits are extended to stay in Poland and work.

Additional support for public investment in road and railway infrastructure. As well as PLN 1 bn to support operational situation of companies managing airports.

In response to the second wave of the pandemic, on November 4 the anti-crisis shield 6.0 was announced which was approved by the president on December 15. The additional fiscal measures are targeted to the most affected sectors of the economy and include exemptions from social security contributions, subsidized loans, wage subsidies and benefits for self-employed. The estimated cost of such support is around 1.7 percent of GDP, including the extension of PFR shield to some new branches, announced on January 19 and February 2. The key measures include:

  • Co-financing of fixed costs for SMEs in the industries most affected by the restrictions. Subsidies under the PFR Financial Shield of up to 70 percent of fixed costs not covered by revenues, if revenues decreased by 30 percent compared to the same period in 2019.

  • Writing-off of the subsidies and the repayable part of the PFR liquidity loans to micro firms and SMEs, which are affected by the new sanitary restrictions if their revenues in March-2020 to March-2021 drop by at least 30 percent year on year.

  • Extension of the Financial Shield program for large Companies until March 31, 2021 (applications) and June 31, 2021 (payments). Change in the rules for calculating the damage due to COVID-19 in preferential loans from the current March - August 2020 to March 2020 - March 2021, in accordance with the original shape of the program.

  • Continuation of de minimis guarantees for SMEs and liquidity guarantees for large companies, which requires coordination with the European Commission on the possibility of subsidies to cover installments for loans with maturity of 6 years for industries affected by the restrictions.

  • Continuation of subsidies to jobs in the form of standstills and reduced working time.

  • Extension of the standstill benefit for self-employed persons in the industries subject to restrictions.

  • Exemption from social security contributions for industries affected by the restrictions.

  • Co-financing of a change in the scope of activities under grants for business; increasing the amount of the subsidy from 6 to 8 times the average salary and extending it by co-financing not only new activities, but also changes in the scope of current activities for industries affected by the restrictions.

  • Second chance policy: Co-financing by the Industry Development Agency (ARP) of costs related to the restructuring of enterprises.

  • Co-financing of leasing in transportation sector.

  • The voucher of PLN 500 for all teachers to cover expenses for the IT equipment necessary to provide remote teaching.

  • The National Bank of Poland (NBP) reduced its policy interest rate by 140 bps to 10 bps, with rate cuts on March 17, 2020 (50 bps), April 8 (50 bps), and May 28 (40 bps),since March 17. The NBP has provided liquidity to banks, reduced the required reserve ratio from 3.5 to 0.5 percent, and changed the interest rate on required reserves to the level equal to the policy interest rate. The NBP has also purchased of Polish Treasury securities in the secondary market, and on April 8, expanded eligible securities to include those guaranteed by the State Treasury. The NBP has also introduced a program to provide funding for bank lending to enterprises. Through March 17, 2021,the NBP had purchased PLN 113.4billion (4.9percent of 2020 GDP) in Treasury and government-guaranteed securities in the secondary market.

    In addition, the 3 percent systemic risk buffer for bank capital requirements has been repealed. The Polish Financial Supervisory Authority (PFSA) announced measures related to provisions and reclassification of loans to existing SMEs/micro-enterprises to allow distributing the impact of credit losses over a longer period. Some flexibility has been granted in how banks meet capital and liquidity requirements, and the PFSA is accepting the treatment of a BGK guarantee as to the fulfillment of the “special collateral” condition. The PFSA has adopted a flexible approach for the approval process of long-term guarantee measures under Solvency II for the insurance sector. The PFSA has also recommended a reduction in the risk weight for properties of borrowers that are not used for rentals, which would reduce bank capital requirements. Additionally, the Polish Banking Association has recommended voluntary deferral of loan payments for affected borrowers for up to three months. Banks have also increased limits for contactless credit cards.

  • The NBP intervened in the foreign exchange market in the second half of December 2021 by purchasing foreign exchange, with the purpose of strengthening the transmission of accommodative monetary policy.