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COVID-19 pandemic weakens cities, triggers investments: report

Although the COVID-19 pandemic indeed weakened Polish cities, it also triggered a desire to “build resilience through investments” at the same time, the report “Polish cities in times of pandemic” by the Polish Economic Institute (PIE) indicated.

The financial situation has deteriorated in 79 percent of the 522 surveyed cities. In 80 percent of them, cultural centres function worse, while 47 percent of cities “experienced a decline in the area of business conditions.” As many as 44 percent of the cities point out to the deterioration of the living conditions of the inhabitants.

“At the same time, cities are implementing remedial measures in connection with the pandemic situation. 26 percent of them have improved sanitary safety, and almost half of the cities (45 percent) have announced investments in the digitisation of social services,” the report reads.

The authors of the report highlighted that 36 percent of cities plan to increase their debt in 2021 to implement their investment plans. Digitisation is one of the investment priorities. In the case of cities over 100,000 residents, as much as 81 percent of respondents declare an increase in activities in the area of digitisation of their services.

According to the authors of the report, 2021 will be crucial for cities in the context of their long-term response to the SARS-CoV-2 coronavirus pandemic and its consequences. “The main challenge will be to maintain financial liquidity, largely supported by grants, subsidies and credit instruments,” the authors wrote.

The report summarises the research conducted among 55 percent of all Polish cities. On the basis of data provided by city representatives and city office employees and a variable created by PIE analysts (including factors like the financial and economic situation of cities, living conditions of residents, the local labour market, the functioning of enterprises, business environment and the activity of social organisations in cities), the following cities were distinguished: with very bad, bad, good and very good socio-economic situation.

The situation in half of the surveyed cities was considered bad, while in 27 percent – good. In turn, every tenth city is in a very bad situation, and 13 percent have found themselves in a very good situation.

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