By Gareth Jones and Kuba Jaworowski
WARSAW, Dec 1 (Reuters) - Poland's anti-crisis package will cushion the effects of a slowdown in the European Union's largest ex-communist economy but provides little in the way of fresh stimulus, economists said on Monday.
The headline-grabbing price tag of 91.3 billion zlotys ($31.40 billion), announced by Prime Minister Donald Tusk on Sunday, is misleading because the bulk of the funds has already been allocated.
The package includes measures to improve liquidity in the inter-bank market, loan guarantees for small and medium-sized businesses, previously announced tax cuts and plans to speed up distribution of EU funds for infrastructure projects.
Tusk also announced his centre-right government was scaling back its 2009 growth forecast to 3.7 percent from 4.8 percent.
"We should not talk of a 90 billion zloty package but of a plan to minimise the effects of the crisis," said Ryszard Petru of the Warsaw School of Economics.
"The idea is to speed up infrastructure spending and also to break the deadlock we see in the banking system by making credit more easily available to entrepreneurs."
Market reaction was muted, though Poland's banking sector welcomed the announcement as a step in the right direction.
"The interbank market has stabilised but mainly when it
comes to overnight deals and you can't do business normally
based just on overnight operations," said Mariusz Grendowicz,
CEO of BRE Bank
"So the government's move to guarantee loans for 3 months to 5 years is very important and is in line with what we among the banks' chief executives were asking for."
WORRIES
Despite relatively firm growth of 4.8 percent in the third quarter -- down from 6.7 percent in 2007 -- Polish officials are increasingly worried about the likely impact on Poland of looming recession in the euro zone, its main trade partner.
Last week, the central bank cut interest rates by 25 basis points and more monetary easing is expected in coming months.
Poland's measures came days after the European Commission urged all EU member states to unite in an EU-wide fiscal stimulus package worth 200 billion euros ($260 billion) to stave off recession. "This (Polish) plan contains a propaganda element as it's good to be able to say we'll inject about 7 percent of GDP into the economy. But actually many of the measures proposed were already a done deal, for example the tax cuts," said Michal Dybula, an economist at BNP Paribas in Warsaw.
Poland is determined not to increase its budget deficit because of the need to show tight discipline to investors grown deeply wary about emerging markets and also to keep on track hopes of adopting the euro as early as 2012.
Finance Minister Jacek Rostowski said on Sunday keeping the 2009 budget deficit at a previously planned 18.2 billion zlotys was crucial for Poland's credibility, a stance that will require spending cuts of 1.71 billion zlotys or additional revenues.
The government plans increased excise duty on alcohol to help cover the shortfall triggered by slowing growth.
"If we were already in the euro zone, I would not mind an increasing deficit, but being outside, the government has to show we are fiscally very responsible," said Petru.
Economists said the success of other measures hinged on how they were implemented, noting continued bureaucratic obstacles to the spending of EU funds.
The revised growth forecast for 2009 may also prove overly optimistic, they said. Analysts expect growth of 3.5 percent next year, while the Organisation for Economic Cooperation and Development (OECD) predicts 3.0 percent. (For anti-crisis package details, see table ...[ID:nL1509231]) (Editing by Stephen Nisbet)