As the PM pointed out, Putin has not only attacked Ukraine. He also attacked energy security in Europe and food security. He attacked through inflation. “Putinflation is Putin’s second great weapon,” the PM stressed. “It is inflation through which he wants to destroy economic development and recovery after the pandemic,” he added.

“However, the government is not burying its head in the sand. We recognise the problems and immediately try to face them,” PM Mateusz Morawiecki said. “That’s why we are proposing a bold plan that will give relief to PLN borrowers. We intend to help them through the difficult time of raised interest rates,” explained the PM.

At the same time, the PM noted that Poland’s prospects for economic growth are good. This year the gross domestic product will grow by at least 4 per cent. “Poland has not only more than made up for any losses after COVID-19 but is on a very fast track of economic growth, as evidenced by the figures on industrial output or retail sales,” Mateusz Morawiecki explained.

Support for families in mortgage repayment

The war in Ukraine and the high prices of raw materials, especially gas, translate into higher inflation. The government is combating it and wants to help Polish families who have to meet increased mortgage payments caused by higher interest rates. 

The aid will target families with mortgages in PLN. There will be four pillars of support for borrowers.

• Pillar 1: Four months of “payment holidays” – this support will amount to about PLN 3 billion per year (income shifting).
  • We will reduce annual servicing fees by as much as one-third in 2022 and 2023.
  • The solution will be available to all borrowers with mortgages in PLN.
  • A simple application for a payment holiday will be available to submit via online banking.
  • No interest on the mortgage value for the payment holiday period.
• Pillar 2: Assistance for borrowers with temporary problems – the support will amount to PLN 1.4 billion in 2022 and PLN 2 billion in 2023.
  • For families who cannot meet mortgage payments, we provide subsidies of up to PLN 2 thousand per month for up to 3 years. This is total repayable support of up to PLN 72 thousand, of which up to PLN 22 thousand can be remitted.
  • To be eligible for the subsidised mortgage payments, it suffices to fulfil one of the following conditions:
    • at least one of the borrowers has the status of an unemployed person,
    • the monthly servicing fee of a home loan exceeds 50 per cent of the monthly income.
    • monthly income in 2022 after deduction of the servicing fee does not exceed:
      • PLN 1,552 / person in one-person households;
      • PLN 1,200 / person in multi-person households.
• Pillar 3: Introduction of a new interest rate indicator in place of WIBOR from 1 January 2023 – the support will amount to about PLN 1 billion per year.
  • Thanks to the abolition of WIBOR and the introduction of a new, more beneficial interest rate indicator, additional money will remain in the pockets of borrowers.
  • A new reference rate (for O/N financial transactions).
  • This solution will decrease borrowers’ payments in total by about PLN 1 billion per year.
• Pillar 4: Additional mechanism for systemic resilience – Assistance Fund
  • Enhancing the protection of bank customers and the resilience of the banking sector.
  • Thanks to the new legal framework, banks will have the opportunity to create an additional banking security system – similar to the system successfully operating in the cooperative banking sector.
  • Banks will subsidise the Assistance Fund with at least PLN 3.5 billion.

Thanks to these solutions, for example, a four-person family with a mortgage of PLN 300 thousand for 20 years will be able to get:

• “payment holidays”: 2x4 months without mortgage payments;
• in case of problems, non-repayable assistance to meet payments – up to PLN 22 thousand;
• about PLN 9 thousand less in repayment of the whole mortgage, thanks to the new interest rate indicator;
• Anti-Putin shield and anti-inflation shield.

In the fight against inflation, the government has also already introduced solutions that will guarantee that more money will stay in Poles’ pockets

Support from the state budget covers, among others, farmers who are in danger of losing their financial liquidity. The aid applies to fertilisers that agricultural producers bought between 1 September 2021 and 15 May 2022. The subsidy will cover up to 50 ha of land and amount to PLN 500 per ha. Applications for fertiliser subsidies can be submitted to the Agency for Restructuring and Modernisation of Agriculture from 25 April. This is real support for farmers and all Poles who will pay less for food products. This solution will also help to ensure food security in our country.

In addition, we are extending protection against uncontrolled increases in gas prices until 2027. This solution will benefit seven million households, housing associations and cooperatives, as well as entities such as hospitals, schools and cultural institutions.

The government has also introduced two anti-inflation shields, providing, among other things, a reduction in VAT on electricity, fuel, gas or heat.

Personal Income Tax (PIT) reduction as of 1 July

To combat the effects of inflation, the government has also decided to lower and simplify taxes in Poland. From 1 July 2022, the PIT rate will drop from 17 to 12 per cent, i.e. by five percentage points. In addition, the tax-free amount will remain at PLN 30 thousand and the tax threshold at PLN 120 thousand.

• The PIT rate will drop from 17 to 12 per cent in the first tax bracket up to PLN 120 thousand. This solution means a tax reduction of almost 30 per cent.
• The PIT reduction applies to taxpayers on the tax scale: pensioners, employees, contractors and entrepreneurs.
• Based on the solutions before 2022. Almost 6.7 million taxpayers would not pay PIT. After the changes, more than twice as many people will not pay tax, as many as nearly 15.2 million taxpayers.

At the same time, a partial deduction of health insurance contributions from the tax base will be introduced for certain entrepreneurs. The rules of applying the tax-free amount to advance payments will also be more favourable. Moreover, preferences for families and children will be introduced, and single parents will be able to settle their taxes jointly with a child and benefit from 1.5 times the tax-free amount, i.e. PLN 45 thousand. However, single parents raising a child with disabilities will benefit from a double tax-free amount, i.e. 60 thousand PLN.

The changes will benefit over 13 million taxpayers. After the reform, Poles will have an additional 15 billion PLN in their pockets.

European Economic Congress (EEC)

The EEC is an open forum for debating the future of the European and Polish economies. The format of this event is expanding and developing.

The EEC has become a brand of a year-long media campaign covering many topics of key importance for the future of the economy and diverse forms of activity. The campaign includes events such as EEC Trends and the publication of reports, talks on important trends, and a three-day, multi-threaded debate in Katowice.