Five Economic-Policy Questions for Poland's Incoming Government
- Law & Justice's spending promises may increase budget deficit
- Party mulls growth mandate for central bank, to pick new MPC
A Polish national flag flies above the presidential palace in Warsaw, Poland.
Photographer: Piotr Malecki/BloombergWith Poland’s Law & Justice party set to take power after winning an unprecedented parliamentary majority in last month’s election, here are the main questions investors have for Beata Szydlo’s government.
The party is signaling a softer tack on its spending promises, stressing the need for additional budget revenue to keep the budget deficit from rising above 3 percent of gross domestic product. The cost of their pledges is 39 billion zloty ($9.8 billion), compared with the outgoing government’s planned 2016 budget deficit of 54.6 billion zloty. Szydlo’s priority will be to introduce a monthly allowance of 500 zloty per child, which may cost 19 billion zloty next year alone.