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800 plus instead of 500 plus and inflation. Prime Minister Mateusz Morawiecki on the effects of increasing the benefit

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After the introduction of a higher child benefit in the amount of PLN 800, there will be no additional inflation impulse, Prime Minister Mateusz Morawiecki claims. According to the head of the Polish government, inflation in Poland is currently in a downward trend, which will deepen at the end of the year.

During the Sunday convention of the Law and Justice party, the president of the party Jaroslaw Kaczynski announced an increase in the child benefit from PLN 500 to PLN 800 from 1 January 2024.

President less than a year ago PIS however, admitted that Mrincreasing the benefit could fuel price increases. Jarosław Kaczyński in June 2022 was asked on TVP3 Bydgoszcz whether there would be 700 plus before the elections. – 700 plus is a pro-inflationary move. I don’t think it was. But this does not mean that we will stop helping families – said the PiS president, referring to media reports about raising 500 plus up to PLN 700.

800 plus and inflation. Mateusz Morawiecki answers

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Mateusz Morawiecki was asked during Monday’s press conference about these words of the group’s leader. – That is why we propose 800 plus from January, because we are convinced that then inflation will be in a strong downward trend. So it is consistent with the words of Mr. President, because at that time inflation was in an upward trend. At that time, we did not know how inflation would develop in the following quarters and years, replied the head of the Polish government.

He added that currently “both forecasts of international institutions and our own” indicate a decline in inflation. – 800 plus is an additional PLN 24 billion, it is this type of financial injection. It will be around 0.7, 0.8 percent. GDP. – he gave.

According to Morawiecki, “it will certainly not translate into expenses in its entirety.” – We know very well that some of this money is saved by Poles (…) Economists know perfectly well and are able to calculate that there will be no additional inflation impulse here, which will reverse this current trend – said the Prime Minister.

Mateusz Morawiecki was also asked what the source of financing the indexed benefit would be. – First of all, we continue to improve the operation of the tax system, the public finance system, we further tighten (taxes – ed.) – said the head of the government. He said that Ministry of Finance prepared a bill “in which there are billions more to seal VAT, CIT”. – Secondly, from stronger economic growth next year than this year – he said.

Inflation in April amounted to 14.7 percent.

The Central Statistical Office reported on Monday that inflation in April 2023 amounted to 14.7% year on year. Compared to the previous month, prices went up by 0.7 percent.

The Central Statistical Office pointed out that since April 2021 the consumer price index has been above the upper limit for deviations from the inflation target set by the Monetary Policy Council. The NBP inflation target is 2.5 percent. +/- 1 percentage point

PAP/Maciej Zielinski

Main photo source: PAP

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