Poland’s budget deficit and public debt: Is the situation really as good as it looks at first glance?
According to the preliminary estimates published by the Polish Central Statistical Office on 4th of April, the general government deficit in Poland in 2017 amounted to 1.5% of GDP, which was the best result since 2007, while the public debt to GDP ratio decreased to 50.6% (compared to, respectively, 2.3% and 54.2% in 2016). The very low deficit to GDP ratio resulted mainly from a significant improvement in the balance of the central budget. Ministry of Finance noted on their webpage that this improvement “was primarily a result of a number of measures aimed at rebuilding the tax revenue and tightening the tax system.” But is the situation really so bright?
In 2017, the deficit of the central government amounted to PLN 25.4 billion (EUR 6 billion) and was lower by PLN 20.8 billion (EUR 4.9 billion) than in the previous year. The central government revenues increased by 11.4%, and spending increased by 4.2%. Together with a solid GDP growth rate (4.6% in real terms), it brought down the general government deficit to 1.5% of GDP.
Photo: Deputy PM and Finance and Development Minister (Prime Minister since January 2018) Mateusz Morawiecki briefs reporters on Poland's budget at a news conference in Warsaw in 2017. FORUM