Poland′s unlikely PiS dividend | Business| Economy and finance news from a German perspective | DW

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The recently reelected Law and Justice’s (PiS) second term in office will run into more problems than its first, with slower economic growth undermining its spending plans. That’s the view of many, both on the left and right.

PiS kept its absolute majority in the parliamentary election, but remains short of the “presidential majority” (267) that would allow it to reject a presidential veto (presidential elections are in May 2020) and of the “constitutional majority” (306 votes), allowing amendments to the constitution. It also lost the Senate.

Read more: Opinion: Poland solidifies its illiberal politics

The party has had an impressive record since late 2015, when it came to power, with GDP growth averaging 5%, inflation below target and interest rates at record lows. There had been fears the party’s plans would lead to a deterioration in public finances, but this didn’t materialize.

Firstly, strong economic growth and improved tax collection boosted tax revenues and public finances were managed prudently right up to just before these recent elections. Secondly, there was a shift in the composition of public expenditure, with the increase in social spending coming at the expense of spending in other areas. 

Polen Nationalkonservative PiS-Partei gewinnt Parlamentswahl (AP/D. Bandic)

The government’s plan for a balanced central budget for 2020 is based on optimistic spending assumptions

Is the PiS victory pyrrhic?

The economic backdrop is much less supportive of strong growth now than in 2015. The economy is at a later stage of the…


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