The Polish Prime Minister’s Office announced that the government had adopted the draft budget amendment for 2024 with a maximum deficit level of 240 billion zlotys (€55 billion), up from 184 billion zlotys (€42 billion), writes Poland’s Business Insider.
Economists had not anticipated such a jump, with the highest estimate at some 30 billion zlotys, but Finance Minister Andrzej Domański stated that he had no worries about the European Commission’s reaction to the budget amendment. He added that the amendment will not significantly affect the deficit of the general government sector, which is forecasted for this year to be 5.7 percent of GDP.
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Regarding the budget amendment, the Chancellery of the Prime Minister stated: “This year, the GDP growth rate in nominal terms will amount to 6.8 percent, compared to the planned 9.5 percent, and the forecasted average annual inflation will fall to 3.7 percent from 6.6 percent.”
Domański told journalists that the government had only introduced corrections to the act on the revenue side, while the expenditure side remained unchanged, adding that the ministry decided to not reduce budget expenditures because the savings and flexibility in the state treasury will be used to finance expenditures related to the tragic flooding that hit the country last month.
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“Changes on the revenue side result from factors beyond the government’s control (…) Lower inflation is of course good news, but it also translates into lower VAT revenues than assumed in the act by 23 billion zlotys,” he said.
The budget will also suffer from not receiving 6 billion zlotys in profit from the National Bank of Poland, while revenues from the sale of CO2 emission allowances will be approximately 9 billion zlotys lower.
Notably, the state will potentially see 11 billion zlotys less in corporate income tax (CIT) “due to the weaker economic situation in the eurozone.”
Domański also announced that approximately 1.2 billion zlotys more would go to Poland’s healthcare system and approximately 600 million zlotys to social insurance for farmers (KRUS).
