The Polish government will have to engage in actively stimulating the economy through fiscal policyas there is no doubt that the closure of borders and a fall in exports due to coronavirus will lead to a significant economic slowdown in GDP growth.
The government must amend the state budget and be prepared to borrow to pay for the necessary expenditures requried to combat the coronavirus and keep the country’s economy afloat.
Traditional fiscal strictures and goals will have to fall by the wayside in order to adjust to a new and rapidly changing situation.
The government will have to take measures to help small- and medium-sized busineses (SMEs) that will inevitably be hit the hardest by the coronavirus crisis. Appropriate instruments will have to be funded by the state budget to assist those branches of the economy suffering the most, such as the tourist sector.
These will have to include measures to insure liquidity such as tax holidays and even tax cuts. This will hit the state’s budget, but it will be a price that must be paid.