May 20, 2020 / 12:52 PM / 5 days ago

Poland's economy may shrink 4-5% in 2020 due to lockdown - ministry

FILE PHOTO: An excavator demolishes a building near skyscrapers in the centre of Warsaw, Poland November 9, 2017. REUTERS/Kacper Pempel

WARSAW (Reuters) - Poland’s economy may shrink in 2020 by 4-5%, more than the previously forecast 3.4%, as the coronavirus lockdown has lasted longer than anticipated, a senior finance ministry official said on Wednesday.

In a nod to the economic crisis, the deputy director in the ministry’s macroeconomic department said Poland plans to suspend a rule curbing public spending before the 2020 state budget is amended at the end of June or start of July.

“The European Commission has said that it saw Poland’s economy contracting by 4.3%. The market consensus is minus 4-5% and we are moving in this direction, but it’s not an official forecast,” Joanna Beza-Bojanowska told a news conference.

Poland is lifting curbs imposed to prevent the spread of coronavirus, reopening restaurants, shopping malls and kindergartens. But many parts of society remain closed, with schools expected to reopen no earlier than in September.

The eastern European Union country of 38 million people has reported 19,268 coronavirus cases and 948 deaths.

The health ministry hopes the number of infections may start to fall next week, but expects a second wave in the autumn.

Poland documented its first coronavirus infection in March and soon after announced a 212-billion-zloty aid package to soften the economic repercussions of the virus.

The package includes support from the central bank and the state PFR fund which backs infrastructure projects and raises debt to distribute cash to companies struggling under lockdowns.

Reporting by Marcin Goclowski and Pawel Florkiewicz; Editing by Andrew Heavens and Mark Heinrich

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