The expected GDP dynamics assumed in the budget at 3.7 percent is an overly optimistic forecast and the zero-level of the budget deficit was based on PLN 50 billion (€11.8 billion) one-off inflows, believes Stanisław Gomułka, chief economist at the Warsaw-based Business Center Club (BCC).
“Analysts’ forecasts assume GDP growth this year at the level of 2.5-3.5%. So 3.7% is considered too optimistic. If the economic growth this year were close to 2.5%, then the whole sector deficit will appear at around 3%,” Gomułka said.
According to him, exports were also founded at too optimistic levels, taking into account, among others, economic weakness in Germany.
“The budget for 2020 also assumes that inflation will average 2.5% and in the first quarter of this year it is expected to be close to 4.5%,” the economist added.