Poland has some welcome news after new data shows the country’s budget deficit came in lower than expected.
Polish Prime Minister Mateusz Morawiecki told a conference on public finances in Warsaw that Poland’s economic perspectives are good because of the stable and sound state of the country’s public finances.
“The result of the deficit was a positive surprise,” said Poland’s prime minister.
Morawiecki noted that budget deficit for 2022 totaled just 12.4 billion zloty (€2.65 billion), and the public sector deficit represented only 3 percent of Polish GDP.
He said he was pleased to be able to reveal that the budget deficit for 2022 was much lower than planned. The government had budgeted for 30 billion zloty (€6.40 billion), but the deficit amounted to just 12.4 billion zloty (€2.65 billion). He added that they had expected public sector debt to be 3 percent of Polish GDP.
Morawiecki recalled that in 2022 the government implemented large support programs in order to offer the public relief from high energy and food prices with lower VAT rates on food and energy. That was done at a considerable cost to the state budget, making the results achieved all the more surprising.
The Polish prime minister was pleased with the way the current government has been able to markedly increase tax yields from taxes such as the corporate income tax (CIT). The money raised by the state from the CIT has risen by 190 percent over the seven-year period the ruling conservatives have been in office.
He contrasted this with the previous liberal administration, which only increased the yield from corporate income taxes by 2.3 percent during their eight years in office.
Morawiecki also accused the previous liberal administration of poorly managing Poland’s public debt.
He said that his government, despite huge spending on saving jobs during the pandemic and on protecting people against inflation caused by Russia’s war in Ukraine, was able to decrease Poland’s public debt to GDP ratio by at least t2 percent, whereas under the previous government, it had grown by 9 percent.
Poland’s head of government expects the total public debt to GDP ratio to fall to between 48 and 50 percent this year, well below the EU average of 85 percent, with several countries breaking 100 percent, and well within the limit envisaged by the Polish constitution of 55 percent.
The data was sound, argued Morawiecki, with no manipulation of the statistics. In fact, the statistics were those of the European Commission and rating agencies.
Morawiecki said that when preparing the 2023 budget law, the government assumed that general government debt (EU definition) would be 53.3 percent of GDP at the end of the year.