Public aid for relieving the effects of COVID-19 pandemic

Abstract

Purpose: The aim of the article is to show the direction and size of public aid intended to relieve the effects of the pandemic in Poland. Design/Methodology/Approach: Based on the macroeconomic indicators, the authors present economic effects of the pandemic in order to justify the purposefulness of the granted public aid, and describe its direction and scope at EU level and in relation to Poland. The final part of the study comprises an analysis of the potential outcome of public aid and recommendations regarding future activity. Findings: The article shows the role and importance of public aid in relieving the effects of economic crises. The authors point out the impact of public aid on the behaviour of enterprises and private households, as well as on the overall condition of public finances. Practical Implications: Public aid in Poland has been directed both to businesses and to households in order to counteract the negative effects of the pandemic. The authors show that despite the undertaken steps, during the period under study the rate of cuts both for enterprises and private households was growing, while for companies the rate of investment was decreasing. In addition, the state revenue generated from taxation decreased, whereas budget expenditure went up. These dependencies constitute an important implication for decision-makers in relation to the size and form of public aid, both already granted and planned in the future. Originality/value: The economic crisis caused by the current pandemic is unprecedented in terms of its reasons as well as the pace and effects of its spreading. This study fills a gap in the subject literature by showing the mechanism of the crisis, the value and scope of public aid employed to relieve its effects, and also the impact of the undertaken initiatives on the behaviour of businesses and households.