Poland’s banks are bracing for an unprecedented shock as the Covid-19 crisis pushes the country towards its first recession for nearly 30 years.
Analysts at Raiffeisen Bank International (RBI) are predicting that the economy, which expanded by 4.1% in 2019, will contract by 2% this year after Poland went into lockdown on March 11.
To mitigate the effects of Covid-19, the Polish government announced on March 18 a stimulus package purportedly worth Zl212 billion ($49.9 billion).
In practice, this includes limited support for Polish businesses.
Liquidity measures previously announced by the central bank, including Poland’s first quantitative easing programme and a local version of the targeted longer-term refinancing operation (TLTRO), accounted for a third of the headline number.
Guarantees for corporate credit from the BGK development bank and a new public investment fund accounted for most of the remainder, leaving just Zl29 billion for firms and workers.
